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Cargo Damaged in Transportation

There are many processing factories for raw fish in Qingdao. China. Factories import fish materials from abroad and process in China, at last export to overseas, this is called processing trade. One of my clients is doing this business. In spite of more safe ship transportation nowadays, there are still accidents occurred in the sea. When the risk occurs, and cargo is damaged, how should factory do? Please see following case which I settled.

My client (hereunder named Factory) signed with an English company (hereunder named buyer) for selling IQF Atlantic cod moulded fillet skinless boneless frozen fish, 23000 kg, value 100,000 USD, transports from Qingdao to Southampton UK with two containers by seaway.

1. I reviewed the bill of lading which issued by carrier orient oversea container line (OOCL), factory as shipper, English buyer as recipient, stowed at temperature -18℃.
2. When the cargo reached destination port, the buyer inspected the cargo at port, found the cargo were damaged, with abnormal color. So buyer did not accept the cargo, and then the cargo were returned to Qingdao.
3. After Qingdao factory received the returned cargo, appointed independent inspector to survey the cargo conditions without prejudice. Inspector found that the cargo was air-dried, color changed to white grey, some frozen into big lump. The probable cause of cargo damage shall be attributed to cargo stowage temperature abnormal change during transportation. The cargo was sustained severe temperature change during transportation.
4. The carrier OOCL also entrusted interteck to survey the cargo, and interteck opinion is that during sea transportation, the temperature is well, as per finding, they concluded that shipment defrosted before. This situation shall be attribute to the temperature of the cargo over -18℃and the long times of storage of the cargo. Due to there was no pre-shipment inspection report available, their opinion that there has been no malfunction of the said carrying reefer container and that temperature has been well maintained during the passage. In brief: container is good, damage caused by hot temperature before shipment.
5. On the basis of inspection report of Interteck, OOCL did not admit its fault during sea transportation; deny to pay compensation to factory. After two month of negotiation, OOCL provide the container temperature record to factory. OOCL declared that from the container temperature record, during the transportation, temperature was below -18℃.
6. And as usual practice, the factory did not insure the export cargo, so without insurance policy. In my opinion, according to Chinese maritime litigation procedure, the plaintiff (factory) shall provide evidence proving that the cargo was good before shipping. So, I viewed the documents and found the certificate issued by Chinese Entry –Exist Inspection and quarantine of China, it was clear stated that this cargo was for human use, and satisfy the requirement of European standard. In this case, the factory shall get compensation from carrier OOCL.

1. I took this case to Qingdao maritime court. In the court hearing, the defendant argued that from the temperature record, no problems of the container, the cause of damage shall be high temperature before loading in container, so this was factory’s fault. I told Judge that this temperature record was not original, so, the court shall not admit this evidence. And the plaintiff had proved that cargo has good quality before export. Therefore if any damage occurred during the course of transportation, it was carrier’s fault.
2. The court accepted my opinion that the carrier had no evidence showing carrier managing the container well in the process of transportation. As referring to the container temperature record, this evidence obtained by carrier only, not by court. The carrier argued that they applied the court to investigate the temperature record when the ship would arrive in China. I argued that there was long period from the accident, so the temperature maybe changed, and not original, so court shall not adopt this evidence.
3. At last, by the conciliation of Judge, the OOCL agreed to compensate plaintiff 70,000 USD. The factory was satisfied with this result.



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