HiHonor lawyers representing the Bill of Lading Carrier recently successfully defeated a Bs/L contract of carriage of containerized fresh garlic cargo damage claim, for a voyage from loading port Qingdao, China to disport Brazil.  The PRC Qingdao Maritime Court (QMC) fully declined Shipper’s cargo claims in Dec. 2018.  Shipper Appealed to Shandong Province High People’s Court, appeal judgment was issued on 10^th July 2019, held that the judgment of 1^st instance court Qingdao Maritime Court was affirmed.

The first instance court judgment and the Appeal court judgment highlighted the below key issues—1) Whether Shipper still have the title to sue carrier after original Bs/L being transferred to receiver/consignee at disport in Brazil? 2) Whether alleged cargo damage was occurred during the carrier’s responsibility period in charge of the cargo?

Both first instance QMC court and Appeal court upheld that the Shipper was NOT lawful Bs/L holder of the export shipment from China to Brazil, hence no matter whether losses were incurred during this B/L voyage, the shipper shall have NO title to sue the carrier.

The court of first instance held that, during the carrier’s responsibility period in taking care of cargo, the parameters were set at temperature as requested by shipper and was well maintained during whole carrier’s responsibility period; shipper once provided LOG to the carrier, stating that cargo was hot-loading, and shipper agreed to bear all risk and damages arising from such hot-loading of fresh garlic cargo.  There is no evidence proving that the cargo damage was caused by abnormal refrigeration and malfunction of ventilation of the container.  The fact that deterioration on cargo condition caused failure for Customs Clearance at disport Brazil, was attributable to the shipper did not pre-cool the goods before loading into container, for which the carrier shall not be responsible.

The damaged fresh garlic cargo was shipped back to Qingdao by same carrier，with the Shipper as B/L consignee for the return voyage from Brazil to Qingdao.  The cargo report issued for the return voyage could only prove the cargo condition when it was shipped back /returned to Qingdao, but in no way to prove the cargo condition prior to the commencement of the return voyage from Brazil to Qingdao China.  Therefore, carrier shall NOT be responsible for any alleged damages during the return B/L voyage.

For B/L cargo claims, whether claimant have legitimate right namely the Title To Sue, is always an important legal issue, the most recently judgments in this matter may serve as good reference for dealing similar Bs/L cargo claims in the future.

The above summary serves as only a resume, for details, please refer to full judgments.  Should you wish to discuss in details, welcome to contact HIHONOR Shipping Team via the below:

xinwei.zhao@hihonorlaw.com

wenjuan.li@hihonorlaw.com

huanying.liu@hihonorlaw.com

vicky.wei@hihonorlaw.com