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Rights and potential liabilities of parties - Coursework Example

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Rights and potential liabilities of parties Author Course Grade Institution 16th December 2011 Introduction In the case, there are damages of coffee cases, which were transported, from Bristol to Qingdao by ship. The largest part of the cargo is affected by damp and hence fermentation of many coffee cases…
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Download file to see previous pages When the goods were loaded from Bristol, Oriental Shipping Limited had to sign the bills of landing. They agreed in the bill that, the goods were in good order but one case was missing. Instead of recording the date as it was, that is 15th August; they recorded the date to be 10th of August. Supreme Coffee Limited obtained an insurance policy for the voyage with Commodity Insurance which incorporated the Institute Cargo Clauses (B). Again, incorrect statement was recorded. They recorded the cost of the cargo as 50,000 pounds instead of 30,000 pounds. This means that the insurance policy was taken out of 50,000 pounds instead of 30,000 pounds. This is over writing of the insurable goods. In this case, it is quit clear that Supreme Coffee Limited obtained an insurance policy with Commodity Insurance. The insurance policy was to cover against any risk of the shipment. Article 1.2.2 of Institute Cargo Clauses (B) provides cover against damage or loss of goods transported caused by washing overboard or jettison1. Article 1.2.3 provides insurance cover against damage or loss of the subject matter insured caused by entry of river, sea or sea water, into the vessel craft, place of storage or hold conveyance. In addition, Article 1.3 provides insurance cover against total loss of any package whether lost overboard, when unloading from or loading to, craft or vessel2. However, Article 4 provides some exclusion to the insured. According to Article 4.1, insurance policy will not cover against expense or damage brought by willful misconduct of the insured3. Analysis of the case The coffee cases which were taken to the dock were in good condition. When they were taken from the factory by Supreme Coffee Limited, none of them was wet or damaged. It is true to say so because Oriental Shipping Limited confirmed it. Although Oriental Shipping limited was not keen on safety of the coffee cases, it cannot be noted that the cause of damp was caused by spraying of water at the dock. There is no evidence to support this because the fault was not detected when the cases were loaded on to the ship. However, if only part of the cargo was damaged and not all, it will be difficult for the insurance company to be held accountable4. This case is similar to Nelson Marketing International versus Royal Sun Alliance Company of Canada case which took place in year 2006. In the case, the cargo was LTF (Laminated Truck Flooring) and it was moving from Malaysia to California. The cargo was damaged but the main cause was not known. It was no clear whether it was damaged due to moisture inherent or improper care in the laminated truck flooring. The ruling was finally made after 94 days of trial in the Lower Court where a decision of 92 pages was given5. According to the insurer, the exclusion of willful mischief of the insured was applicable. On the other hand, the owner of the cargo complained of the carrier’s negligence in handling and care of the cargo. According to the court, the damages were not caused by the carrier’s negligence. It was caused by heat in the feeder vessels at voyage time and therefore, the insurer was held responsible. However, in the Court Of Appeals, the decision of the judge was reverse. The court argued that, with the nature of LTF, the damage was bound or certain to happen. The temperatures in the feeder vessels were normal and were expected6. In this case, it is evident and logical to say that, the damage of the cargo was not ...Download file to see next pages Read More
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