INDIVIDUAL ASSIGNMENT 2

INTERNATIONAL
Prepared for: Dr. Mohd Azwardi bin Md. Isa

LOGISTIC Prepared by: Farahiyah binti Ghazali (828485)

(GFMA6053 )
Table of Contents

Question 1……………………………………………………………………………………………………………………………. 2-3

Question 2………………………………………………………………………………………………………………………………. 3

Question 3……………………………………………………………………………………………………………………………. 4-5

Question 4……………………………………………………………………………………………………………………………….. 5

Question 5…………………………………………………………………………………………………………………………………6

References ...................................................................................................................................... 7

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Q1. Explain the situation based on your understanding.

In this situation, accountability for harm to cargo on board the vessel will rely upon
the contractual phrases of carriage. Reference needs to be made to the Charterparty and
or payments of lading. Charterers beneath this structure of Charterparty are accountable
for the engagement of stevedores to impact stowage of the cargo and stay accountable
for their actions. The Master of the vessel has an overlying duty for the security of a ship
and is entitled to work out this have to the reflect on consideration on the stowage
preparations for the cargo to be unsatisfactory. Stevedores are employed to help in the
loading and discharging of cargo from a vessel. Responsibility for their moves will rely
principally upon who engages their services, the shipper of cargo, the proprietor of the
ship or the charterers of the ship. Stevedore harm can be categorized, broadly, into three
(3) varieties which is injury to ship, injury to cargo and private injury.

According to my judgement is a dispute between owners of the vessel and the

receivers. Owners was once both making an attempt to outsmart receivers or an easy
error of sending out the cargo with scarcity of items or both broken goods, of these bags,
some have been damaged, some torn and empty, some wet, and some short-delivered
so after proprietors dispatched out the cargo, It was once located at the discharge port
that some range of bag had been brief delivered or absolutely broken, as such the cargo
used to be arrested by means of the receiver. While the vessel used to be on detention,
the receivers ask for compensation for the brief delivered or broken goods, whilst the
vessel used to be on the detention, the receiver claimed for $150,000 in money or a
financial institution guarantee, for $540,000 in admire of the scarcity and broken goods.
So, upon charge of $100,000 via the owners, the vessel was once released, due to the
fact the consignment price of the items used to be round $73,000.

Owners additionally claimed for damages for detention whilst the vessel used to be
underneath arrest by means of the receivers, proprietors argued that the detention used
to be induced by using the receiver’s endured insistence of receiving a financial institution

2
warranty alternatively than a P&I membership letter of understanding, which is in breach
of clause 62 of the charterparty. In this case of the vessel however proprietors and
receivers each have been missing communication, they fail each to talk nor believe every
different sufficient to amicable conclusion, most importantly proprietors did not raise out
their due diligence earlier than sending out the vessel, whilst receiver adamant demand
for money a or financial institution warranty fee delayed the vessel in detention as such
resulted to greater broken cargo.

Q2. Why customs imposed fine to the cargo?

Customs duty refers to the tax imposed on goods once they are transported
across international borders. In simple terms, it's the tax that's levied on import and export
of products. the govt uses this duty to boost its revenues, safeguard domestic industries,
and regulate movement of products. Firstly, the definition of detention claim. A claim for
detention will arise where a vessel is delayed by default of the charterer, or those for
whom he's responsible, either on the approach voyage or carrying voyage, or at the port
of loading or discharge, including delays after the completion of cargo operations. If the
2 consignees hold on to the carrier’s container beyond the allowed free days, detention
are going to be imposed.

In this case study, the receiver has arrested the cargo due to the discrepancies of
the shipment, this demanding for a cash or bank guarantee compensation, which owners
would rather settle with P&I Club letter of undertaking, this dispute between owner and
receiver led to the cargo exceeding the quantity of free days in shipping line. Customs
imposed a fine to the cargo because of a detention of the cargo, because the cargo was
in detention thus the container weren't delivered back within the allowed free day, the
determine free days is that the number a shipper can use the container free.

3
Q3. In your opinion, what is the main cause of this incident? Explain the logistical
process starting from delivery point to receiving point and highlight where fault might
happen.

Figure 1: The shipping process

Refer to above Figure 1, indicates the complete delivery procedure from the beginning
point, Export customs clearance and will be ended at the Import customs clearance. In
my opinion the major reason of this incident is the brief delivered or broken cargo, due to
the fact the cargo used to be chartered for the carriage of full whole cargo sugar. However,
at the same time as the vessel on this discharge port, there was once plenty of discovery
was once made. Many of the luggage had been damaged, torn, empty and some even
wet, which in lower back provoked the receivers, and led to the arrest of the vessel.

The first step that be taken by way of the importer is to make request for citation
so that the purchaser can proceed with order goods, which potential ordering the items
from the vendor. The customer will ask for a proforma bill from the seller. This file is
commonly use to grant complete estimated fee and it can be altered or replace when it is
needed. Once the purchaser problems a buy order to the vendor, this contract is normally
covered by means of one of the Incoterms. Secondly is for the freight forwarder to
organize process for the export of the cargo. The archives that require to be put together
via the provider is the packing list, a certificate of origin, hazardous items shape and so
on. The 1/3 step is reserving of the freight. The fourth step is when the items will be touring
4
to worldwide depot or ports at this point, the consignment of lading will be supplied after
the receiver comes to select up the goods. At the fifth step, the items will be processed
via exports customs clearance and vicinity it in transit mode. Step six takes place as
quickly as the items arrive in buyer's us of a for import clearance, straight away after the
items arrived in the use of a of destination, items will bear an import clearance. Step seven
which is the final step whereby the items will be transported from the port to buyer. When
the items are cleared customized and it is prepared to go, it will then be delivered to the
consumer at the transport factor agreed upon.

Fault would possibly show up at the establishing of loading the cargo, if there are
perishable goods, or different structure of goods, if it is now not treated carefully, it can
without problems get harm except full expertise of the supplier. Also, in this case find out
about it was once referred to or alleged that the stevedore broken some of the items whilst
unloading, so fault can happen in each loading and unloading of the vessel and as nicely
as when in the transition.

Q4. What kind of insurance taken in this case?

The insurance plan taken in this case is Marine cargo insurance. Marine cargo
insurance plan is a category of property insurance plan that insures property whilst in
transit towards perils consequent or incidental to the navigation of the sea or air or
waterways. It is additionally an Open Ocean Cargo Policy mechanically covers all
shipments of insured as lengthy as they are stated to insurance plan company. The
essential concepts of Marine Insurance are drawn from the Marine Insurance Act, 1963.
As in all contracts of insurance plan on property, the contract of Marine Insurance is
based totally on the integral concepts of Indemnity, Insurable Interest, Utmost Good
Faith, Proximate Cause, Subrogation and Contribution.

5
Q5. Do you agree with the judgment made? Justify your answer.

In a concise judgment, Knowles J held that the Tribunal's interpretation of

"government interferences" used to be wrong, in actuality for the motives superior through
charterers. In particular, the Court stated it was once needless for it to produce a
commonplace definition of "government interferences". It used to be ample to exhibit in
this case that the cargo had been seized with the aid of a customs authority that used to
be a nation income authority performing in its sovereign capacity. That, in the Court's
view, amounted to "government interferences" on a herbal and every day that means of
these words.

I agree with the judgment made in this case, as the purpose be that each owners
and receiver have been at fault for the result of the broken cargo. While it may be cited
that the owners did not meet their personal stop of the good deal by way of loading the
cargo with broken luggage of sugar, or baggage that have been quick delivered, it must
additionally be mentioned that the non-stop detention of the vessel by using the receiver.
While stressful for a money or a financial institution guarantee. It led to water harm of the
cargo and additionally the broken brought on via the stevedores, for which the receivers
had been in cost of. And for that, I completely agree of the judgement that each owner
and receivers ought to share their percentage liabilities of the cargo harm which is; the
Owners 35% and the Charterers or Receivers 65%

6
References
Stevedore damage from:

https://www.ukpandi.com/news-and resources/briefings/1998/stevedore-damage/

Detention from:

https://lawexplores.com/8detention/#:~:text=8.1%20A%20claim%20for%20detention,the%20c
ompletion%20of%20cargo%20operations.