The issue presented was whether freight forwarders (or their duly appointed agents) should be held liable for the damages caused by delay in delivery of the goods.
The facts
The claimant and the respondent concluded a contract in which the respondent had full freight forwarding authority on behalf of the claimant, including space booking for import and export cargoes, customs declaration, shipment, etc. In May 2011, the respondent did a deal in which the subject matter was to be shipped from port A to port B, as agreed upon in the contract with the respondent.
The claimant alleged that the goods were delivered 10 days later than the planned delivery date, and that this was the respondent’s fault. Thus, the claimant was entitled to claim damages caused by the delay.
The respondent said that the parties had never expressly fixed a delivery date, nor had the respondent ever promised the claimant one. So the respondent believed it had already fulfilled its obligation under the contract.
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The tribunal’s opinion
The tribunal found that there was no express agreement, nor any supplementary agreements on the delivery date of the goods, before or after the shipment of the goods.
According to the first paragraph of article 50 of the Maritime Code of the People’s Republic of China, “delay in delivery occurs when the goods have not been delivered at the designated port of discharge within the time expressly agreed upon”.
Article 5.7 of the China International Freight Forwarders Association Trading Conditions stipulates that “ the company shall not be under any liability for the date of arrival or departure of the goods, except and unless under special arrangement previously made in writing”.
And article 10.2 says further that “in the case of claims for delay in respect of the transportation or delivery, the company’s liability shall not exceed the amount of the company’s freight for the goods, the delivery of which has been delayed”.
Besides, the International Federation of Freight Forwarders Association Model Rules for Freight Forwarding Services provide in article 8.1.2 that “the freight forwarder shall in no event be liable for … loss following from delay unless expressly agreed in writing”.
The above-mentioned stipulations show that freight forwarders are not liable for delay in delivery of the goods, excluding those with a fixed delivery date. During the process of maritime transport, including but not limited to loading, departure, arriving and discharging, there are many factors that could affect the delivery time and are usually out of control.
Arrival time
Therefore, it is hard to fix an arrival time for the cargoes at the discharging port. And this is the reason why the Maritime Code of the People’s Republic of China sets such a high liability threshold regarding delay in delivery.
As the exporter, the claimant should have informed the respondent, as the freighter, of its special requirements in terms of the delivery time, if the claimant had one, at the time of the conclusion of the contract.
Only in this way can the respondent be considered to have accepted the requirement, or dropped the deal due to the instability of maritime transport delivery dates. Following this step, the freight forwarder should have informed the carrier of the time requirement and then seen if the carrier was going to accept, deny or conditionally accept, for example, higher payment for some special delivery arrangements.
Arbitral award
Since no express agreement upon delivery time between the parties existed, the tribunal denied the claimant’s claim under delay in delivery.
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The author, Cai Lingli, is a case manager at China Maritime Arbitration Commission.
