China: Freight Forwarder's Entitlement To Be Reimbursed For Expenses Incurred At Discharging Port

Last Updated: 21 May 2014
Article by Jin Yu-Lai

Facts

In April of 2012, the defendant entrusted the plaintiff to handle the freight forwarding issues of two shipments. According to the requirement, the plaintiff duly booked cargo space with Weihang. Thereafter, Weihang issued the bills of lading (No.SHAJKTY124061, No.SHAJKTY124081) which recorded the shipper is the defendant, the loading port is Shanghai, China, the discharge port is Jakarta and the service type is CY/DOOR, freight prepaid. Finally, the two shipments safely arrived the discharging port.

However, the defendant did not pay the freight forwarding fees or reimburse the terminal charge paid by the plaintiff for the defendant in amount of RMB 237,034.75 and RMB 528,898.65.

The plaintiff filed a law suit against the defendant for the above mentioned fee and disbursement.

The Focus of Controversy

As the defendant's entrusted agent, our lawyers made full investigation and collected evidences into each dispute, and issued legal opinions on the basis of facts.

The focus of controversy of this case is concentrated in the following two aspects:

(1) Who should pay the freight forwarding fee?

The defendant argued that the payer specified in the several invoices is Sichuan Construction Development Co., Ltd. Jinte'er Steel Structure Factory (hereinafter "Steel Structure Factory"). Therefore, it has no obligation to pay the relevant freight forwarding fee.

Our lawyer explained that the reason why the payer was Steel Structure Factory was that the defendant required to do so. In addition, according to the principle of substituted performance stipulated in the Contract Law, under the circumstance that Steel Structure Factory does not pay, the defendant will still be liable for the payment.

(2) The problem of the terminal charges

The defendant had the different opinion on the reason why the terminal charge arose. The defendant hold that the freight forwarder should make reasonable judgments on whether the cargo had undergone any test run and the consequences thereof at the discharging port and it should en- sure the clearance information correct.

Our lawyer argued that it's the defendant that should be responsible for the consistency between the actual shipments and the clearance information. No evidence showed that the defendant can/ should discover the condition that the cargo had underwent test run, which beyond the due care of common freight forwarder. Therefore, the plaintiff has no fault during the process of performing the contract, and the terminal charge should paid by the defendant.

The defendant also argued that the trade terms in this case is DDU, i.e the defendant has no obligation to pay total fee when the transportation is not complete.

In terms of the above argument, our lawyer rebutted that DDU shall only be binding between the parties of the sales contract, which cannot restrain the plaintiff as a freight forwarder. As a result, once the plaintiff had already fulfilled the obligation, the defendant should pay the total freight for- warding fee and terminal charges.

Meanwhile, our lawyer submitted the affidavit of the agent of the carrier at the port of destination bank slip of the relevant terminal charges to prove it had paid the terminal charges above for the defendant.

Decisions

Based on the sufficient evidences provided by the plaintiff and justifiable arguments, the court supported the plaintiff's claim. The court decision was as follows:

(1) The defendant should pay the freight forwarding fee RMB237,034.75 and interests to the plaintiff in ten days of the judgments coming into effect.

(2) The defendant should pay the disbursement USD 46,153.13 and interests to the plaintiff in ten days of the judgments coming into effect.

Therefore, our lawyer greatly protected the rights and interests of our customer and resolved this case quickly and successfully.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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