Can any one guide me as to what are the legal steps to be taken - if a shipment is received in one's name as consignee and B/L also it shows with the banker name under our name as consignee.
The bankers had returned the document to supplier bank on our request as we have informed them we cannot clear as the order has been cancelled by email.
Kindly guide us as to what we have to do if shipping liner in the port of destination send us a threatening letter stating they would file demurrage and compensation claim for such a shipment which was cancelled by us as consignee with the supplier - reply to [email protected]
For law, you need a lawyer and all the details - lacking both, I can offer you this, which is ONLY an opinion and not law...
You must first be aware of the different parties in this transaction; being the ‘importer', the ‘consignee' and the ‘buyer'. While you may see them each as the same party - and in physical terms they may well be - they are in fact different contractual entities (that is, they are involved in different and separate contracts.) By the same measure, in this example there is also the ‘shipper' and the ‘seller'.
The ‘importer' only has that name and status once they pass or present their import entry to Customs & Excise. If the import entry has not been presented, then they are not the ‘importer of note' (or ‘of record') and customs would have no authority over them. Secondly, the ‘consignee' only has that name and status if they willingly enter into the contract with the carrier (in this case, the shipping line.) This willingness would be evidenced by perhaps paying the freight charges or (subsequent to import clearing) applying for release of the cargo - or perhaps they have already evidenced their willingness by initiating the transaction and booking the cargo, although it is more likely that the ‘shipper' did this. Again, if a party has not given any of these indicators to show they are willingly in the contract, then the shipping line cannot bring the contract terms to bear on them and they are not the ‘consignee'.
So, if an ‘importer' does not yet exist, the import customs authority will hold the uncleared cargo as abandoned and they will use it as security against any debt due to the State, arising from the import event. Should the goods subsequently (at auction) enter the economy they will seek to recover, in the auction price, the applicable import duties and taxes, along with any storage and handling charges incurred by the State in getting the goods to that point. Third parties who may also have incurred costs can appeal to the authorities to have these costs also recovered as part of the auction price and any surplus recovered over-and-above the State's costs may be distributed on a pro-rata basis to such approved third-parties. But the States' costs come first.
Equally, if abandoned ‘correctly', then a consignee does not exist and therefore the shipping line will hold their principal liable - with their principal being the shipper or the party who booked the cargo with them initially. In this action they may settle all storage charges and hold the cargo pending the shipper's disposal instructions - after all, if the State's storage and handling are settled, the State will be willing to allow the cargo to return to origin without the payment of duties and taxes - although the shipping line would then look to the shipper for the return or on-carriage freight costs too.
If the shipper also abandoned the cargo, (assuming they have the right to do so under the terms of the contract of carriage), then the shipping line would generally not return the cargo to origin, but would exercise their rights under a general or special lien and ask the State to recoup their charges at auction - although as mentioned above, the States' costs come first and the shipping line would still have the right of recourse against the shipper (their principal) for any ultimate shortfall.
In the event of abandonment, the common course of action is for the carrier to refer the matter back to the shipper for their further instruction, but (in a nut shell) the shipper will bear the cost and risks of the forfeit of the cargo should they not wish to meet those costs.
Whether the ‘seller' now has recourse to the ‘buyer' for these charges which the seller incurs as the ‘shipper' is a matter of the terms and conditions of the private sales agreement the seller and buyer have entered into - and, of course, even if the sales contract gives the seller certain ‘rights' in the matter, whether they would have the time and money to pursue those rights through the courts is often down to ‘commercial arithmetic'. It may even be that the buyer has the right to avoid the sales contract under certain conditions and assuming these conditions have come about, the subsequent abandonment may well be something the seller has anticipated.
It goes without saying that the situation of abandonment is made possible mostly through imprudent sellers giving their buyers ‘open accounts' i.e. unsecured credit. It isn't impossible, but it remains less likely, for the buyer (as importer/consignee), to abandon cargo if they have already paid for it.
In your case, I am assuming that the documents were sent on a collection basis: never the wisest choice for the seller, but one that gives you options as the buyer - as I am sure you will agree.
one hill at a time, please