The challenges we faced
- No information regarding the cause of the fire outbreak.
- Limit of liability by CMR is lower than the amount paid by the insurer.
Shipping from Sweden to Spain. The type of cargo was
hairdressing supplies, and it was duly insured. Despite all efforts, it was impossible to determine the cargo whereabouts.
Although the circumstances did not point to a clear-cut negligence from the carrier, and the jurisprudence is not unanimous in these types of cases, through negotiation, we have managed to break the limit and to settle the case for a higher amount (a 200% of the CMR limit).
Therefore, having broken the CMR limitation and doubled its amount is a undoubted success. With this amicable solution we have managed to recover a 37% of the loss, in a very short time and without the costs, uncertainty and tardiness inherent to a lawsuit.
A sale of goods was arranged between a German maker of high quality cutting edge machinery and a very large Indian industrial conglomerate, for the purchase of two sets of brand new Horizontal Concentrix Machines along with their accessories for almost 1.000.000USD.
Transportation of these two sets of machines was arranged from their factory in China, in a multimodal carriage, up to the final storage depot of insured near Pune, Maharastra. What the final destination of the goods was and how many modes of transport are involved is an important factor to take into account; as such, the larger the number of conveyances that are involved in a transportation, the higher the risk of something going wrong is, as in this case.
Similarly, it is important to properly define what the final destination of the goods is. For instance, if the final destination is well inland in the country, involving a truck journey, more risk is also attached to the carriage.
In order to properly understand the case, it is essential to be aware that within the terms and conditions of the purchase there was a clause regarding insurance stating the importer was to arrange for insurance of the goods during transportation. However, as the purchase was much more complex than a simple Purchase Order, a CIF Navasheva purchase was also agreed.
Though this fact may seem confusing, it is very often the reality that a contract contradicts itself, articularly transportation contracts, international sale of goods contracts and also insurance contracts, as there are several documents nvolving one single agreement.
Therefore, these agreements may contradict themselves. Actually, an Indian importer of goods entered into an agreement with New India for the insurance of the goods while in transit.
Nonetheless, and this is the important point, it turned out there was a Chinese Insurance Company insurance policy in place for the same goods during the same transportation, covering the very same risk. Though there was some misinterpretation as to where the Chinese Insurance Company cover extended to, ie, Mumbai or final destination Pune. So, the Chinese Insurance Company certificate of insurance contradicted the Chinese Insurance Company insurance policy, creating ambiguity as to the extent of the insurance.
It is not unusual that things go wrong sometimes, as in this case. While inland transportation in India was taking place during February 2019, one of the trucks tilted and the machines were damaged.
While there was not so much apparent damage to the machines, being a highly exact machine, all of the sensors inside the machine and plenty of its milimetrical features inside got damaged and the cost of repairs was concluded by experts to be beyond the cost of a new machine. Accordingly, total loss was declared.
The importer presented a valid claim towards New India for the loss and this claim was of course paid out by New India accordingly. Nonetheless, some flaw was detected during the claims handling process as there were discrepancies in between what the insurance policy of Zurich stated and what the insurance certificate stated.
After seeking advice from Marlin Blue, an amicable claim was brought against Chinese Insurance Company in order to get compensation for the indemnity paid out by New India, as it was detected the same risk may be covered under two different insurance policies.
It is always tricky handling claims in different countries, however, when it comes to China, the level of difficulty increases significantly as more obstacles are put in the way of an amicable claim. The Marlin Blue global network´s ability to open the right doors and find solutions was crucial in this case.
After the claim was presented, several refusals to compensate were received from Chinese Insurance Company, alleging the insurance policy was clear on what the destination of the transport was and its insurance cover, which is true as the final discharge point was Nhava Sheva Seaport, India.
Nonetheless, it is also true the insurance certificate stated a different destination for the goods, i.e. “warehouse of the importer, transhipment to be covered, if goods are transhipped”. Moreover, an insurance certificate was used in the documentary credit.
Lengthy discussions took place, in Chinese and in English, including some formal requests for settlements and even included seeking the advice of Chinese lawyers in order to bring litigation for the case if no amicable settlement was reached. After all this, a 200.000USD settlement was achieved, which was a great success and a good recovery, given the country where the claim was sought and even the very merits of the claim.
Moreover, it was not easy to get this money out of China, as Chinese authorities are very reluctant to remit money to overseas countries; therefore, some further negotiation was needed in order to finally get this money into the New India bank account. Marlin Blue was instructed by New India to carry on with recovery efforts for our Client.
We initiated the claim against both the freight forwarder and the actual carrier, although it soon became clear that the two companies belong to the same group. Luckily they had cargo insurance, so we sent the claim to their insurance company as well. At the same time we made efforts to learn more about the circumstances of the accident and insisted that the insurer of the carrier would accept our explanations regarding the salvage sale.
Eventually they accepted our reasoning that damaged goods must have been transported back to origin because this was the most economic solution in the given situation.
Transport of merchandise, sent from the UK to the south of Spain. Cargo was aircraft spare parts, expensive pieces. The carrier lost the merchandise while it was in one of its transit facilities between way station Germany and its final destination in Andalusia.
Our customer insured the transport for the Spanish buyer and paid EUR 16.000 for the lost cargo.
There was no clear evidence of intent or negligence. The shipment was simply lost in a complicated route from origin to destination. Carrier even tried an internal investigation to find the lost goods and gave as many explanations as they could.
The liability limit by weight of the lost cargo, according to applying CMR Convention was only 200 euros, way less than the actual loss.
Carrier relied on that limit and their offer was exactly 200 euros.
The carrier had a relatively high deductible and the costs had to be assumed by one of their stations individually. Obviously, no station wanted to assume the loss.
We already had a good relationship with the carrier from other claims in the past. They have always been reasonable.
We tried to make them see that the jurisprudence on the matter is not clear, except in obvious cases, and that a judge could perfectly consider that, during the complex journey that the merchandise followed, the carrier disregarded its duties of security and guarantee of the merchandise. Also, the cost of maintaining open litigation in court should be assessed, both in terms of money and time.
We were also a bit lucky that the person handling the matter inside the carrier had the ability to achieve an agreement among their stations about the deductible.
The insured of our clients, cargo interest, hired Hanjin in order to transport frozen pork from China to Algeciras.
During the transport, Hanjin went bankrupt and this produced worldwide supply chain and shipping disruption as cargo ships were left stuck at ports and canals w aiting for cash payments.
In our case, three reefer containers of insured of our principals were in a terminal in Algeciras when it happened. As a consequence of the bankrupt of Hanjin, containers were left in the terminal.
When consignee got recover the goods, consignee found them with important damages due to broke cold chain.
During a Road transport between Italy and Spain, both the truck and the cargo were lost, not reaching their destination and the whereabouts of both were unknown. Reported the events to the Italian police, investigations remain open.
The insured of our client, the owner of the merchandise, had ordered the transport through a freight forwarder in Poland, who instructed the transport to a carrier domiciled in the Czech Republic.
We open negotiations with all fronts, not only the companies involved but also including the insurer in Poland of the freight forwarder and with the insurer in the Czech Republic of the carrier.
When it became clear to us that the second would not answer for the facts, we pressed to reach a quick agreement with the freight forwarder himself, despite the fact that his lawyer wanted to apply the liability limit established in the CMR Convention. We were able to break it alleging fraud of a subcontractor of yours, the carrier, who had disappeared with the truck.
We obtained 100% of the loss amount in an amicable recovery, without incurring legal expenses, and breaking the liability limit of the CMR Convention. An already extraordinary deal by itself, and more taking into account the complexity of the case in terms of the parties and countries involved.
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