dispute over contract of carriage of good

Updated：2002-11-27 Views：2686 
                                 TIANJIN MARITIME COURT

                                     CIVIL JUDGMENT



Planintiff: Shanxi Industrial Products Import & export Co.

Address: No.133 Xinjian Road,Taiyuan,Shanxi

Legal Representative: Yan Wenjing, general manager

Agent ad Litem: Shi Chuan, lawyer of Tianjin Liren Law Office



Defandant: Huanlian Marine (China) Co.

Service Address: Suite 6, Section A, Wanlong Central Mansion, No.85

Liuwei Road, Hedong District, Tianjin

Legal Representative: Zhang Zhijian, president

Agent ad Litem: Wang Hong, lawyer of Tianjin Dawei Law Office



Defendant: Huanlian International Consulting Service (Tianjin) Co.,

Address: Suite 6, Section A, Wanlong Central Mansion, No.85 Liuwei Road, Hedong District, Tianjin

Legal Representative: Shen Jinfu, president

Agent ad Litem: Wang Hong, lawyer of Tianjin Dawei Law Office



Defendant: COSCO Container Lines

Address: No.1555 Changyang Road, Shanghai

Legal Representative: Wei Jinfu, president

Agent ad Litem: Liu Zuoming, lawyer of Beijing Haitong Law Office



Third Party: COSCO International Forwarding Co., Ltd., Tianjin

Address: 19-21 Flooor, Section A, COSCO Building, Hedong District, Tianjin

Legal Representative: Ye Weilong, president

Agent ad Litem: Shao Zhong, staff of the company



With respect to the cases of dispute over contract of carriage of good by sea filed by Shanxi Industrial Products Import & Export Co. (the Plaintiff) against the Defendant Huanlian Marine (China) Co. (hereinafter referred to as the first Defendant), the Defendant Huanlian International Consulting Services (Tianjin) Co., Ltd. (hereinafter referred to as the second Defendant), the Defendant COSCO Container Lines (Hereinafter referred to as the third Defendant) and the third party COSCOTianjin International Freight Co., Ltd., a collegial panel was constituted in accordance with law to hear the case in public after this Court entertained the case. The agents ad litem of the Plaintiff Shi Chuan, Li Xin, the agent ad litem of the first and second Defendant Wang Hong, the agent ad litem of the third Defendant Liu Zuoming and the agent ad litem of the third party Shao Zhong attended the Court hearing. The case has bee conclude now.

It is claimed by the Plaintiff that they entrusted the Defendants to ship goods on June 2000 in accordance with the sales contract concluded between the Plaintiff and the Canadian buyer R&G ,a party irrelevant to this case. As the agent of the first Defendant, the second Defendant signed and issued the Bill of Lading No.HF21Hl008, in which it was stated that name of vessel was M/V ?°Feng He?±, description of goods was stainless coupler, port of loading was Tianjin and port of destination was Vancouver.

Originally, the quantity of goods entrusted by the Plaintiff to carry was two metal cases, but actually it was three metal cases shipped on board the vessel. In the cases, but actually it was three metal cases shipped on board the vessel. In this aspect, the Plaintiff had ever notified the second Defendant to alter the quantity of goods shipper on 28 June 2000.    

It is claimed by the Plaintiff that they entrusted the Defendants to ship goods on June 2000 in accordance with the sales contract concluded between the plaintiff and the Canadian buyer R&G, a party irrelevant to this case. As the agent of the first Defendant, the second Defendant signed and issued the Bill of lading No.HF21HL008, in which it was stated that name of vessel was M/V ?°Feng He?±, description of goods was stainless coupler, port of loading was Tianjin and port of destination was Vancouver.

Originally, the quantity of goods entrusted by the Plaintiff to carry was two metal cases, but actually it was three metal cases shipped on board the vessel. In this aspect, the plaintiff had ever notified the second Defendant to alter the quantity of goods shipped on 28 June 2000. In the return letter, the second Defandant responded that there was no time to make such alteration as the goods had reached the port, thus two metal cases out of the three at the warehouse were bounded together as one packing for shipment. Further, the second Defendant promised that the foregoing act would not affect the taking delivery of the goods in question at the destination port. After arrival of the goods at the destination port, the consignee took delivery of two metal cases only and there was one case short delivered. The consignce immediately contacted the carrier?? agent at Vancouver, requesting them to look for the missing goods but in vain. Therefore, the consignee requested the Plainitiff to make up the missing goods. Under the circumstance that the Plaintiff had requested the Defendant and their agents to look for the goods on several occasions but in vain, the Plaintiff had to make up the missing goods to the Canadian buyer R&G on 30 October 2000 and to pay 20% damages for breach of contract according to the sales contract.

On 26 December 2000, R&C informed the Plaintiff that the carrier??s agent notified them that the missing metal case had been found and that the goods was not delivered at Vancouver for reason that it was miscarried to Toronto. As the Plaintiff had made up the missing goods, R&G no longer needed such goods and requested the Plaintiff to dispose of the goods themselves. Under the repeated requests of the Plaintiff, R&G finally agreed to accept the goods at only 60% of the contract price. As a result, the Plaintiff suffered the losses in sun of RMB58,423.43 for the lowering price, the freight, tariff for the making up goods and the damages for breach of contract.

The Plaintiff took the view that the three defendants and the third party should be under the absolute liability for such delay in delivery of goods, which resulted in the economic losses of the Plaintiff. Therefore, the Plaintiff requested the court to order the three defendants and the third party to indemnify them the above mentioned economic losses.

During the hearing of the case, the first Defendant contended that:

1) After delivering the goods in accordance with the sales contract, the Plaintiff ahd fulfilled all the obligations thereunder and should be under no obligation to take the risk and liability of the consignee. The Plaintiff??s making up the missing goods should fall into the scope of another legal relationship. Therefore, the Plaintiff was not entitled to sue against the carrier.

2) The goods in question had never been under the management and control of the first Defendant. If the court were to support the matters of fact as alleged by the Plaintiff, it was those persons actually responsible for the management and control of such shipment that should be held liable for the delay in delivery.

3) The first Defendant had fulfilled their obligation to deliver the goods and had never received the Letter of Claim from the Plaintiff. There fore, the claim of the Plaintiff had been time barred.

The second Defendant contended that, as the first Defendant??s agent, they should not undertake the liability for delay in delivery of the goods in issue.

The third Defendant contended that:

1) As the Bill of Lading in question had been transferred to the consignee, who had accepted such transfer and take delivery of the goods against the same, through endorsement, the Plaintiff was not entitled to file a lawsuit against the carrier.

2) Seen from the Bill of lading issued by the third Defendant, the Plaintiff, who was neigher the shipper, nor the consignee and had no any legal relationship with whe third Defendant, was not entitled to sue against the third Defendant.

3) Since the Plaintiff failed to adduce positive avidence to prove that it was three metal cases that the Plaintiff actually shipped, the lawsuit raised by the Plaintiff lack the suppor of evidence and the basis of facts.

4) As the goods received and delivered by the third Defendant was full container load cargo and the seal was intact in delivery, the third Defendant had fulfilled the obligation of delivery.

5) Even if the Plaintiff could establish that it was three metal cases of goods actually shipped, it was due to insufficient mark and improper declaration of the goods on the part of the Plaintiff that one case of goods was not timely taken delivery at the destination port. There was no any fault or negligence on the part of the carrier. Therefore, the carrier should not be held liable for damages by law.

6) The constitution of delay in delivery of goods must satisfy two legal requirements, that is, definite time of delivery a agreed on one hand and definite place of delivery one the other. In this case, there was no such specification as to the period of delivery in the two Bills of Lading in issue. Therefore, no delay in delivery had ever occurred, as alleged by the plaintiff.

7) Even if delay in delivery did exist and such delay was caused by the carrier, who shall not be exempted, the liability of the carrier for the damages shall be limited only to the freight by law.

8) Since there was no any direct or positive causal relationship between the losses of the Plaintiff and the delay in delivery of the goods, the Plaintiff should not claim for damages against the carrier in accordance with law.

The third party contended that:

1) After the transfer of B/L through endorsement, the title to the goods shall be the consignee. The plaintiff, who was neither the B/L, was not entitled to file the lawsuit against the third party.

2) The prerequisite for constituting delay in delivery is that the carrier and the shipper clearly provide the period of delivery. Where there is no such provision, delay in delivery shall not establish. Even if there was delay in delivery in this case, the consignee or the Plaintiff should adduce taking-over record to prove that the goods in question was delivered to the consignee six months after the vessel arrived at the destination port. Otherwise, is could only indicate that, after signing for the goods, the consignee failed to take delivery of the goods timely or to checked the goods carefully and resulted in shortage in taking delivery. Hence, it was the consignee who should be held liable and it was irrelevant to the carrier.

3) The evidences submitted by the third party were sufficient to prove that, during the whole business operation, the cargo condition as appeared on all documents showed that there only two cases of stainless products. In the meanwhile, it was stated in the delivery order that the goods delivered were in apparent good order and condition. Therefore, there was no delay in delivery or shortage occurred at all.

4) From the day when the consignee signed for the goods, the B/Lheld by the consignee had completed its function of taking delivery of the goods therein and did not serve as the document of title to the goods any longer. With respect to the assumption of liability for breach of contract, the making up goods and the disposal of goods by lowering the price, they were all the disputed over trade between the Plaintiff and the consignee and were of no relevance to the carrier.

5) The evidences of the Plaintiff were insufficient to prove the genuineness of economic losses suffered thereby so far. As the third party did not see the bank account transfer vouchers of payment of damages for breach of contract, the freight for the making up goods of the Plaintiff and payment of the price lowered goods, the evidences of the Plaintiff were seriously insufficient.



In summary, the third party requested the court to dismiss the litigation requests of the Plaintiff.

During the hearing of the case, it was not disputed by the parties concerned as to the following matters of fact:

On June 2000, the Plaintiff entrusted the second Defendant to carry originally two metal cases of goods, but actually three cases loaded into the container. In this aspect, the Plaintiff had ever notified the second Defendant to alter the quantity of goods shipped on 28 June 2000.In consideration that was no time to revise the Customs Declaration Form , the second Defendant instructed the operator of the third party at container loading station to bandage two cases thereof together according to the earlier practice and to make the three cases into two for the convenience of carriage .in the meantime ,the second Defendant notified the plaintiff of such circumstance and advised them that they had full container goods, the second defendant , as the agent , signed the bill of lading of the first defendant to the plaintiff as the container-loading carrier ,the third party loaded twelve shipments of goods including the goods in question in one container and then delivered to the third defendant for carriage to Vancouver ,the port of destination . the consignees took delivery of the goods on 27 July 2000.



The Plaintiff alleged that after the goods in question were carried to the Vancouver ,the consignee only received two cases and there was one case or shortage .the plaintiff requested the defendant and their agent to look for this case on several occasions. On 26 December 2000,R&G informed the plaintiff that the carrier??s agent just notified them that the missing case bad been found and that the case were not delivered at Vancouver because it was miscarried to Toronto ,Canada and thus resulted in the delay in delivery. The third party alleged that , seen from the evidences submitted thereby, it was two cases of goods on all documents from receipt of the goods to delivery thereof and there was no short delivery occurred at all .up till now ,the third party did not see the documents issued by the warehouse at the destination port EUROASIA company and the third party?? agent at the destination port SEAGO , evidencing that they lost the goods and then delivered to the consignee after finding the same . nor did the third party see the agency agreement between O.T.S and SEAGO.



Upon examination ,it was found that the second defendant actually received three metal cases with 2,981 kilograms in weight and 2.2cubic meters in volume. Although there only cases specified in the Bill of Lading issued by the third party , they were 2,981 kilograms in weight and 2.2cubic meters in volume. After taking delivery of the goods and discovering the short delivery, the consignee immediately notified the plaintiff of the same, the plaintiff then checked with the second defendant .both the second and the third defendant had ever contacted and checked with SEAGO, the third??s agent party in Canada. The foregoing matters of fact were evidenced by the correspondences exchanged between the plaintiff and the buyer and the correspondences exchanged between the second and the third defendant and SEAGO.



As to O.T.S Canadian telecom system co., Ltd . was whose agent . in the correspondence addressed to R&G from O.T.S submitted by the plaintiff ,O.T.S alleged that they had just received the notice from the agent company of warehouse EUROASIA, viewing that the missing goods of the buyer had been found. In the meantime ,O.T.S declared that they were no longer the agent of SEAGO and hoped that R&G would contact SEAGO directly .both the address and fax in Vancouver in the letterhead of SEAGO as submitted by the second defendant and the address and fax of the third party??s agent at the destination port as stated in the bill of lading were the same as the address and fax of O.T.S



On basis of the foregoing facts and evidences ,this court held that ,although the third party denied receiving three cases of goods , the volume and the weight measured at loading the container were those of three cases. Further ,when checking with their agent at the destination port ,the third also alleged that the shipment in question was two packing(holding three metal cases).However , the consignee only received two cases of goods .therefore ,it was not a matter of fact in this case that the third party only received two cases of goods according to the specification in the bill of lading . evidenced by the address and fax of the third party??s agent SEAGO at the destination port Vancouver as stated in the bill of lading and acknowledged by the third party ,O.T.S was the agent of SEAGO ,which was the third party??s agent.



2)As to the making up goods of the plaintiff.



The plaintiff submitted to this court the bill of lading of M/V?°Lin Xing?±V.0037E to prove that they did make up 17 cases of goods to the Canadian buyer on 1 October 2000. in light of the foregoing bill of lading and the invoices No.0372547 and 0371548 issued by Yake International Transportation( china )Co., Ltd , the court supported the face that the plaintiff made up the goods.



3)As to the damages for breach of contract paid by the plaintiff to the Canadian buyer.



The plaintiff did not provide any direct evidence with respect to their payment of damages for breach of contract to the buyer with this court . According to the sales contract , the conditions for breach on the part of the seller were that the shipment was more than fifteen days late as stipulated in the contract , or that the cargo shortage was higher than10%. In this case , the plaintiff did not break the provision of the contract and should not pay damages .therefore ,this court did not sustain such as fact alleged by the plaintiff.



In light of the above mentioned matters of fact , it is held by this count that:



1)Now that the defendants had received three cases of goods and specified two cases in the bill of lading only , the defendants should make if clear to the third party and their agent at the destination port so as to avoid short delivery . Obviously ,the first defendant failed to assume the foregoing obligation and should be held party liable for the delay in receiving the goods of the consignee.



2)As the first defendant??s agent , the second defendant should conduct acts of agency within the scope of authorized by first defendant. In accordance with the relevant provisions of agency under Chinese law ,it was the first defendant who should take the legal consequences arising from acts of the second defendant and the second defendant should not be held liable.



3)Although the third defendant was the carrier of the goods in question ,the period of responsibility there of was sound and intact at the container yard when delivery and that it was not the obligation and act of the defendant to deliver the goods to the ultimate consignee , the third defendant should not be held liable for the litigation requests of the plaintiff.



4)As the party responsible for the goods to the consignee as stated in the bill of lading , the third party ,who actually received three cases of goods and specified only two cases in the bill of lading , failed to timely notify their agent at the destination port of such circumstance . at the cheek of the consignee when discovering the short delivery of goods ,the goods agent failed to find the short delivered goods either .as a result ,the goods were delivered six months later .it was obvious that the third party and their agent failed to exercise due diligence to fulfill their obligation of delivery of goods in excess of reasonable period .



5)In the circumstance that the customs clearance of the goods had bee made, the plaintiff altered the number of cases. As a result , the second defendant had to specify two cases in the bill of lading even though actually receiving three cases so as to make the documents conform to those of the customs declaration , which was the hidden trouble for likely short delivery . therefore ,the plaintiff  should have notified the consignee timely as to the foregoing circumstance . however the plaintiff did not make such notice in time , resulting in the short taking delivery of the consignee ,to which the plaintiff should be held party liable.



6)Seen from the items of the plaintiff a claim ,the conditions for payment of breach of contract damages were that the shipment period was more than fifteen days late as specified in the contract ,or that the cargo shortage was higher than 10%. In this case ,the shipment was within the period as stipulated in the contract ; there was no cargo shortage shipped by the plaintiff . according to the trade term in the contract , i.e., CIF , the obligation of the seller as regards delivery should have been completed once the goods were delivered to the carrier . As to the cargo shortage thereafter, the buyer should undertake such risk . the plaintiff should not be under the obligation to pay damages in accordance with the sales contract . hence, the loss of damages raised by the plaintiff was not reasonable and positive and was not sustained by this court . with respect to the loss of lowering price ,as the goods in question were neither seasonable nor damaged ,such item of loss was not positive loss resulting from the delay in delivery ,but form the trade activities between the 

Buyer and the seller and was irrelevant to the carrier. Therefore ,the court did not support such item of claim.

7)Being the shipper of the goods under the Bill of Lading in issue, the Plaintiff had transferred the Bill of Lading through endorsement. With the transfer of the said Bill of Lading, the right of claim against the carrier under the contract of carriage transferred form the shipper to the consignee as well. In this case, as the shipper in the Bill of Lading is concerned, the Plaintiff was not entitled to raise the claim against the carrier.

8)The Plaintiff submitted to this court a letter of subrogation made by the Canadian buyer R&G to the effect that the Plaintiff was subrogated to the right of claim, through which the Plaintiff obtained the right of claim against the carrier under the contract of carriage. However, the right to be subrogated could be only that of the transferor according to the contract of carriage. As far as this case is concerned, it was only the right of claim arising from the losses suffered thereby due to the breach of contract on the part of the carrier that R&G could transfer to the Plaintiff, that is, the basis of the right of claim was losses suffered by R&G. The court noted that the losses claimed by the Plaintiff(the damages for breach of sales contract, freight of making up goods, loss of pricc lowered cargo)were all the losses of the Plaintiff rather than R&G. Therefore, with respect to the litigation requests for the foregoing losses of the Plaintiff against the Defendant on basis of the letter of subrogation, this court did not sustain.

To sum up the above, in accordance with Article 84,112 of General principles of civil Law of PRC, Article 79,402 of Contract Law of PRC, the court hereby render the judgment as follows:

The acceptance fee of this case in sum of RMB2,236 shall be born the plaintiff.

Any party who is not satisfied with this judgment may file a Statement of Appeal in quintupicate within 30 days for the Defendant and within 15 days for other parties concerned upon the date of service of the judgment for appealing at the Higher People??s Court of Tianjin. The party appealed shall pay the appeal fee RMB2,263 to the Higher People??s Court of Tianjin within 7 days from the date of filing the statement of Appeal (Bank Account: Agricultural Bank of China, New Technology Product Zone Sub-branch Office 394-9887000390). Exceeding the foregoing prescribed time limit shall be deemed as waiver of appeal.



Presiding judge :Chen Xianzhang

Judge        :He Yiru