Australian Peak Shippers Association Inc and Freight & Trade - - PowerPoint PPT Presentation

Australian Peak Shippers Association Inc and Freight & Trade Alliance – 29 October 2019

1 Melbourne | Sydney | Brisbane | Canberra | Perth

• Loss or damage to cargo during transit
• Standard form and bespoke Clauses
• Usually incorporate Institute Cargo Clauses (A) 1/1/82 or 1/1/90

2 Melbourne | Sydney | Brisbane | Canberra | Perth

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• From 1 September 2019 to 31

May 2020

• 25 categories of “target high

risk goods”

• “Target High Risk” Countries
• Specified heat or fumigation

treatment for:

• Breakbulk/open top

containers/flat rock containers; and

• Enclosed containers

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• Motor vehicles and accessories from Long Beach,

California

• Scheduled to be shipped 28 August 2018 BUT

delayed until 2 September 2018

• Not Fumigated
• Department advises vessel cannot call into Australia
• Negotiations with Department
• Goods shipped back to USA for fumigation

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• Shipper’s liability to the ocean and/or contractual carrier?

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• Shippers liability to other cargo owners?
• Dangerous Cargo: Mitchell Cotts v Steel Bros & Co Ltd [1916] 2 K.B. 610

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• Third Party Cargo Owner Losses?
• Damage caused by heat treatment or fumigation –

Clause 1 – “All Risks” cover

• Delay – Clause 4.5 – exclusion
• Continuation of Cover – Clause 8.3
• Unloading, Storing and Forwarding goods – Clause

12

• Notification of termination of carriage – Clause 9

MELBOURNE | SYDNEY | BRISBANE | CANBERRA | PERTH 8

• Non compliant cargo owner
• Failure to fumigate likely not an “all risks” cover

under clause 1

• Unsuitability of preparation – Clause 4.3 -

exclusion

• Delay – Clause 4.5 – exclusion
• No cover under clause 8.3 or 12

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• 530 stink bugs found on a vessel while in Australian waters across 11

decks.

• Consignment of vehicles shipped from China, Japan and Korea
• DAWR refuses to allow vessel into Australian Ports
• Vessel returns to Singapore for fumigation – cargo discharged – fumigation

takes place – re-loaded onto vessel – continues voyage under same bills of lading

• Fumigation and freight costs in excess of $2,000,000

• Common Law – Involuntary and the result of a necessity: Leduc v Ward

(1888) 20 Q.B.D. 475

• Bill of lading terms – compliance with orders of government or authority

etc

• Hague Visby Rules – reasonable deviation: Stag Line v Foscolo, Mango

[1932] A.C 328 and Article 4 rule 4

• If BMSB is found the carrier is permitted to deviate

MELBOURNE | SYDNEY | BRISBANE | CANBERRA | PERTH 11

• Common law right if deviation reasonable: The Teutonia (1872) L.R. 4 P.C

171

• Bill of lading terms
• Carrier can claim additional freight and exercise a lien if incurred as a

result of BMSB – Common Law and Bill of Lading Terms allow this

• Insurer no obligation to indemnify pursuant to clause 12 Institute Cargo

Clauses (A) 1/1/82 or 1/1/09 which require transit to be terminated

MELBOURNE | SYDNEY | BRISBANE | CANBERRA | PERTH 12

• Difficult
• Article 3 Rule 1 Hague Visby Rules – Vessel not seaworthy – earlier

cargoes- The Arianna [1987] 2 Lloyd’s Rep 376

• If caused by cargo loaded – not make the ship unseaworthy: The Apostilis

(No.1) [1997] 2 Lloyd’s Rep 241 CA.

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• Claims for either negligent advice or misleading and deceptive conduct if

advise shippers not to fumigate contrary to DAWR directives.

• Make sure you hold an errors and omissions policy which covers liability

for negligent or misleading and deceptive conduct in these circumstances.

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20 Melbourne | Sydney | Brisbane | Canberra | Perth

Maurice Lynch

Special Counsel

Insurance, Trade and Transport – Sydney Phone: +61 2 8035 7975 Mobile: +61 410 768 584 Email: mlynch@millsoakley.com.au

Disclaimer This PowerPoint presentation is intended to provide only a limited analysis of the subject matter covered. It does not purport to be comprehensive, or to provide legal advice. Any views or opinions expressed are the views or opinions of the presenter, and not those of Mills Oakley as a Firm. Readers should satisfy themselves as to the correctness, relevance and applicability of any of its content, and should not act on any of it in respect of any specific problem or generally without first obtaining their own independent professional legal advice.

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Perth

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