ITIC Concludes 23-Year Case

Monday, December 05, 2005
INTERNATIONAL Transport Intermediaries Club (ITIC) has recently concluded its oldest case, dating back to 1982. Reported in the latest issue of the Club's Claims Review, the case involved a Taiwan-based ship agent who acted for a tanker calling at Kaohsiung.

Part of the ship's cargo of 500 metric tonnes of Toluene Dilsocyanate (TDI) was discharged into a bonded shore tank awaiting delivery against production of the original bill of lading. In the event, the consignee managed to siphon off the cargo from the tank without producing the bill of lading and without paying for the goods.

A Taiwanese bank commenced legal action in the Kaohsiung High Court against the tanker owner and the agent for US$560,000 - the value of the cargo. In Taiwan, the local agent for a foreign company has joint and several liability with the foreign company. The High Court initially found in favour of the owner and the agent, and the bank appealed to the Supreme Court of Taiwan.

Over the next twenty years the case was referred back and forth between the High Court and the Supreme Court no less than six times. Finally, at the end of 2004, the Supreme Court of Taiwan rejected the bank's appeal. The agent had won the case, with the assistance of ITIC, but the legal costs were in excess of US$90,000.

Elsewhere in the Claims Review, the Club looks at how a simple documentation error almost resulted in a violation of the US 24-hour rule. The ship agent involved inadvertently allocated a booking reference for a container that had been used for a previous booking.

Although the mistake was discovered, substantial costs had already been incurred. However, had it not been detected, the consequences could have been much worse, with the ship being fined or even refused entry into port.

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