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Analyzing the Case of Forwarder Sue Carrier in the Name of Shipper

Author of this article: attorney of Win & Win Law Firm

Basic fact:

the export factory entrusts the forwarder to export computer accessories, and the forwarder company, after accepting the entrustment, orders the cargo to South Korea for sea transportation. Hanjin issues the sea waybill, the shipper is the forwarder. Upon arrival at the port of destination, the goods were wrongly delivered to others. The export factory agrees to transfer the claims of the carrier Hanjin Shipping to the forwarder company under the bill of lading; if the freight forwarding company recovers the loss successfully, the freight forwarding company shall return the balance to the export factory after deducting the above-mentioned freight and other legal expenses; If the freight forwarding company loses the lawsuit, the transfer of the claim will automatically become invalid. After that, the company filed a lawsuit against Hanjin.

Guangzhou Maritime Court of first instance holds that as the shipper recorded in the shipping documents involved, the freight forwarding company has a contractual relationship with Hanjin Shipping Association for the carriage of goods by sea. It has the right to bring a lawsuit when it suffers loses due to the performance of the contract, and to bring a lawsuit against the carrier suffered by its own rights and interests. The freight forwarding company does not have the interest of litigation in this case for the object of the lawsuit. There is no legal interest between results of the case and the freight forwarding company. Even if the forwarder wins the lawsuit in this case, it does not actually have the interests of the litigation. Freight forwarding company tried to obtain the right of action through agreement with export factory, but the transfer of such right is lack of basis of law. The decision rejected the company’s claim.

The company refuses to accept the first trial decision and appeals to the Guangdong Provincial High People’s court. Guangdong provincial high court believes that: the contract of carriage of goods by sea in Article 41 of the maritime law of the people’s Republic of China and the provisions of Article 42 on the carrier and shipper do not limit the shipper to consign the goods which they do not have ownership. Therefore, whether the forwarder has ownership of the goods involved and the legal relationship between the goods and the export factory will not affect the establishment and effectiveness of the transport contract between freight forwarding company and Hanjin Shipping Association. As the shipper of the contract of carriage of goods by sea, the freight forwarding company has the right to claim for the loss caused by the transportation. The decision annulled the Guangzhou Maritime Court decision and supported the firm action request.

Lawyer analysis:

1. In this case, the relationship between the owner and the forwarder is the principal-agent contract relationship. According to Article 4303 of the contract law, the consignor fails to perform his obligations to the principal because of the third party (carrier) reasons, the trustee shall disclose the third party to the client, so as to exercise the rights of the trustee to the third party, that is to say, the owner has the right to sue the carrier, which is also the common practice in the lawsuit. However, this clause does not mean that the client should exercise its rights and does not restrict the exercising right holder. In civil proceedings, the transfer of rights is also allowed. Article 79 of the contract law of China stipulates that the creditor may transfer all or part of the rights of the contract to a third party, except in one of the following cases: (1) it shall not be transferred according to the nature of the contract; (2) it shall not be transferred according to the agreement of the parties; (3) it shall not be transferred according to the provisions of the law. In this case, the owner has transferred the claim to the forwarder company, so the forwarder has the right to sue.

2. Article 41 of the maritime law of the People’s Republic of China, a contract for the carriage of goods by sea means a contract for the carrier to collect freight and be responsible for transporting the consignor’s consigned goods through sea to another port through sea. In the contract of carriage, there is no so-called owner, the parties are the shipper and the carrier. After receiving the booking, Hanjin Shipping Association issued the shipping bill recording the shipper as the forwarder company and actually carried it, which is enough to show that the contract relationship between the two parties has been established. The freight forwarding company is the shipper and Hanjin Shipping Association is the carrier. As a shipper, the carrier has the right to require the carrier to deliver the goods correctly, and if the goods are lost, it is entitled to claim compensation from the carrier. Conversely, if the forwarder is the shipper, the carrier is also entitled to claim against the forwarder if the carrier is damaged by the cargo problem. After the freight forwarder makes compensation, it can recover the compensation from the owner.




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