At the end of March, the [Japanese] container ship, ‘Ever Given’, got stuck in the Suez Canal. This event is still in the minds of many people. That’s according to Jolien Kruit and Silvia Gawronski, lawyers at Van Traa Advocaten in Rotterdam, the Netherlands. “The phone has been ringing all the time,” Jolien says. “There is a great need for market information. We’ve never experienced anything like it – a grounding in the Suez Canal and then the [Egyptian] authorities detaining the vessel. “
There are more than 10,000 containers on board the “Ever Given”. This further complicates matters. “There are a huge number of parties involved in one way or another.” Much is still unclear today. “How the different parties are affected depends on the contractual arrangements made. And the applicable legal systems.” The damage could be recovered in certain situations. In other similar situations, this may not be the case. However, Jolien indicates that, generally, liability for damage caused by delay is often excluded by contract.
Damage to goods
This does not apply to damage to goods, however. This is not considered damage caused by delay. “Depending on the agreements reached, there are generally more possibilities for recovery”, explains Silvia, a specialist in food law. However, damage to the goods may be the result of delay. She cites grain as an example.
“Some crops, like grains, naturally carry certain molds. This is taken into account for transportation and its conditions. Let’s say a container of corn – which already has a small infestation of aflatoxins – is left at sea in direct sunlight. for a week. This the fungus may start to behave differently. You can’t anticipate that. “
“Under different circumstances, the mold already present during transport would remain within the norm. Now this could have major consequences.” There is also no standard solution for damage to goods. “Companies agree on what they want. For example, a company can assure its customers that it will deliver bananas of marketable quality.
“If you then deliver rotten bananas, you haven’t fulfilled your obligations. Another seller could agree to place the bananas on the vessel reserved by the buyer on time. In this case, the seller has fulfilled his sales obligations. The fact that the bananas started to rot along the way because they ended up on this ship is the buyer’s risk. “
But, the authorities also play a role in the post ‘Ever Given’. Silvia says that within the European Union, importers are often the first party to be held accountable for complying with European food safety regulations. “Importers can’t do anything, for example, if aflatoxin has developed. Still, the Dutch Food and Consumer Safety Authority (NVWA) will approach importers. NVWA will tell them that they cannot market the tested product. Or, if it has been delivered, it must be taken off the market. “
All of the products on “Ever Given” have been in transit for much longer than expected. This could lead to food safety issues. Action must be taken. That is if there is the slightest suspicion of a food safety problem, says Silvia. “That doesn’t necessarily mean that the products have to be destroyed. There may be samples that need to be taken. And that someone has to check those products. This is to make sure that they are still safe. is when you are sure a product is safe that you can trade it in. “
Cost is another factor. Costs were incurred to recover the cargo and tow the vessel. The Egyptian government also filed a claim for $ 900 million to cover their damages. The Egyptian authorities hold the “Ever Given”. That is until the claim is paid or a settlement is reached. Or a deposit for the claim is provided. An appeal was lodged against the seizure.
“We have to wait and see. Intensive negotiations are also taking place in the background. The parties are trying to reach agreements. The amounts are so high that it is very difficult to post a bond,” Jolien said. “There are a huge number of parties with a vested interest in the release of the ship. There is pressure for this to happen.” If the vessel is freed, all of these costs could partly fall under the concept of gross average.
“This means that everyone has to contribute some costs. These were incurred in an unexpected and reasonable way to save the ship and the cargo from danger. They were not factored into the cost of the transport. parties may be required to contribute to this end. ” All parties involved must vouch for their share of the gross average. This is even before the “Ever Given” arrives in Rotterdam. After that, it will be several years before it becomes clear whether and how much they will have to pay.
“There are risks you cannot avoid but can prepare for,” explains Silvia. This can sometimes be done through insurance. But a lot of things about the condition in which the goods are delivered can be included in the contract. Jolien points out that something like the gross average lends itself very well to insurance under a freight policy. The risk of damage is quite low. However, the costs resulting from the raw average can be considerable. “You may be faced with costs like those incurred by ‘Ever Given’. So it helps a lot if all you have to do is call your insurer.”
Insurance costs are relatively low. Jolien says the raw mean happens more often than people realize. “It’s unfortunate. In recent years we have had these kinds of situations on a regular basis.” She mentions fires that have occurred on board ships in recent years. “There, steps are also taken to save the ship and its cargo. The cargo is then sacrificed or damaged. Or you have to contribute because the cargo has remained intact. Either way, you end up taking damage.”
Terms & Conditions
Jolien says it’s a little more difficult to secure loads of fruits and vegetables. However, there are insurers who are also ready to take out transport insurance for fruits and vegetables. This is an important aspect, says Jolien. Most of the large container shipping companies have little scope for negotiation when it comes to liability. Goods in transit insurance covers not only the gross average, but also other risks such as a defective reefer container.
Jolien indicates that then a carrier could be held responsible. “But even if they are liable, the conditions applied often apply on the basis of the most limited liability. This is certainly true in maritime transport.” In this context, explains Silva, the supplier / customer contracts of business partners must be as compatible as possible. This concerns conditions and insurance. “If it matches well, you are at the least risk.”
People don’t think about it often, she says. Generally little attention is paid to terms and conditions when entering into agreements. “It’s only when something is wrong that it becomes obvious that someone has to take the risk. Who is it could be sheer bad luck. Say, for example, the supplier is not responsible and the insurance does not cover in a particular case either. It could suddenly become a major problem. “
For example, it may happen that lemons that have already been sold cannot be delivered. “This results in a loss of turnover for the trader. He may also have had to purchase replacement lemons. This delay can also result in a loss for the buyer of the lemon. He also cannot deliver. If you become the buffer for all of this pity, you have a problem. So it is crucial to look at the insurance and contractual conditions. Jolien compares it to prenuptial agreements. “You write them when you are still very much in love. And you hope you never have to use them. But if things go horribly wrong, it’s good to have such contracts, ”she concludes.
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