Letter of Credit Forum

Dear All,

i would like to know the process to place a claim against the Container’s Weight Shot at Importer’s location. For example; 300 MT Rapeseed has been shipped to Importer’s Location (Let’s assume that the shipment has been made from Australia to India), and at the time of Formal Weighting of each 15X20' Containers at India,importer’s discovered that there were Weight shot of at least 500 KGs (+/-) each in almost 7 to 8 containers out of 15 containers. In such case, how can the importer be able to Claim the loss from exporter  and get the refund value or how can the importer be able to settle this matter in his own favor ?

Any Genius  step by step process/answer would be highly appreciated.

Thanks..

phill doran replies:

Hello Valley Carbon

Ideally, if this is a matter of loss – broken seals and theft etc. – then the importer should claim for the short-supply from their marine insurers, who – if they settle the claim – would press a counter-claim against the party causing the loss. However, the insurance company should have been notified on first arrival of the cargo at the importer’s premises. It may not be possible to claim the loss if the cargo has already discharged.

If, however, the seals were intact on delivery, there is a very good chance that there is no loss but rather that it is either short-supply or a loss in transit due to moister content or some similar condition which is natural to the cargo.

So:

If the seals are intact, the buyer must claim against the seller under the terms of the sales agreement unless the loss is a natural phenomenon.

If the seals are broken, the importer should contact the insurance company on arrival of the cargo and seek direction from them.

If no insurance has been taken out, the buyer is left to argue short-supply with the seller: there is no clear cut position other than whatever recourse is allowed in the sales agreement.

I wish you well with this and others may care to add their thoughts too.

phill

Valley Carbon Replies:

Dear Phill,

Thanks for your response regarding the "Container's Weight Short issue". i want to know further if it's the case that the buyer cleared the containers/cargo with sealed and that he measure the Weight of every container legally in his country and found that some of the containers (let's assume, 5 to 7 containers) were weight short of about 500 kgs to 600 kgs each.

As you mentioned, "If the seals are intact, the buyer must claim against the seller under the terms of the sales agreement". How can the buyer be able to make the claim against such weight short situation ? What are the proofs required to make the claim ? Will buyer get the refund against weight short from the exporter? What can be the necessary thing required by the buyer to make claim against Weight short in such situation ?

kindly answer precisely so that i can get the concrete information.

Thanks in advance...

phill doran replies:

Hello again

If the seals are intact, then the buyer has no claim against the insurance company – as nothing could have been stolen.
The claim then is against the seller.
Your question is answered by the details of the sales agreement: a properly drawn up agreement would specify what could be done – when the buyer must notify the seller and how such shortages are ‘proven’. If it turns out that the seller and buyer have no written contract giving such ‘cure’ clauses, then there is no answer to your question, there is just a ‘negotiation’. If we assume the buyer has already paid, then the possibility of negotiation is made weaker.
In this case you have a classic example of the buyer having ‘rights’ but no way to exercise those rights.
As sales contract is a private affair, the answer to your question is found in the private terms entered into by the parties: there is no general answer. 

phill