Group Assignment - Daniel Puzny (Dan)

Known
Q. How long would it take to ship goods to port by road (Manchester Warehouse to Liverpool Port)?

A. Usually ONE HOUR or LESS driving time. Possible delay due to strike. Loading and unloading time
unknown.

Assumption that the Seller is acting under UK Law due to its jurisdiction and would also be preferred
for the Nigerian based Buyer.

Unknown
How long is the loading period at warehouse?

How long is unloading of truck/s at Liverpool port?

How long is the laytime? (SEE Article Four at end of document)

How should the buyer be informed and what additional information is needed from the Buyer?

Does the Buyer know how long the ship will be in port?

Is the strike a reasonable excuse for any delay (politics)? Does it protect the seller from any delay
loading at port?

Does the Seller admit to having mishandled the faxed instructions? It was more than 7 days “lost”

We know that the liability of the goods is still with the Seller until it is over the rail.

It is the sellers obligation to arrange the CONTRACT OF CARRIAGE.

What are the SHIPMENT TERMS for the SALE OF CONTRACT?

Is there mention of BEST EFFORT or REASONABLE EFFORT?

Quick analysis: These seem to be the major issues to guide what to do:

Seller Side

No repudiation should be made if a reasonable effort is made to remedy the lateness of information
by bearing additional cost to meet obligations. It is after all the Sellers obligation to absorb any costs
in getting to the designated ship.

Motivating force underlying international sales contracts is TRADE

Seller makes Best Effort to still meet commitment of loading on-time. Shipping by road may still
allow the commitment to be met. The time of day on the 15th that the Fax was discovered could
make a critical difference.

IF NOT…
Can they still meet the “Stack Date” window or the laytime? (See Articles at end)

Could the Seller re-negotiate the ship booking (use a different ship leaving at a later time) to still
deliver in April? OR Could they re-negotiate a later receipt time due to unforeseen circumstances but
yet showing goodwill to honour the agreement with a common goal in mind.

Buyer Side

Will the DEMAND FOR GOODS be lessened by any unexpected delay which might cause the Buyer a
loss of business? Will be there be additional inventory costs and reduce income due to delay?

The laytime issue seems to be quite critical also. (See Article Four below)

Will the Buyer be responsible to pay demurrage to shipper if laytime if standard exceeded? Penalties
seem to be common.

Research:
Look for cases with Administrative Errors that caused delay, and cases on late delivery to port.

Further knowledge of loading times would possibly help and the opening window.

Article One
https://www.ukpandi.com/knowledge-publications/article/late-arrival-at-the-load-port-under-
voyage-charters-1564/

This has mention of the unpredictability of ships arrival and some possibly relevant terms such as:

"expected readiness to load" provisions, and clauses requiring the ship to proceed to the load port
with "due diligence" or "due despatch".

Article Two
Stack Dates (indictates how long loading period is in port and the possible viability of delivering
the goods from the Seller on the 16th April)
https://shippingandfreightresource.com/significance-of-stack-date/

Article Three
PDF Attachment – “nor-arundel-castle-2.pdf

Article Four (Unfortunately from Wiki but I will dig into links for real reference)
In commercial shipping, laytime or laydays is the amount of time allowed[1] in a voyage charter or time
charter for the loading and unloading of cargo.[2] [3]
Under a in a voyage charter or time charter, the shipowner is responsible for operating the vessel, and
the master and crew are the employees of the shipowner, not the charterer. However, once the vessel
has "arrived" at a port the charterer then assumes responsibility for the loading and unloading of cargo,
and he has a period of laytime in which to carry this out. (Note that the actual loading may be performed
by a third-party stevedore).
The moment when laytime commences is determined by a Notice of Readiness (or "NOR"), which
the master or agent of the ship must give to the port when the ship has arrived at the port of loading or
discharge. The charterparty contract determines the precise meaning of "arrival". Usually, "arrival" is
when the ship has arrived at the port and is ready in all respects to load or discharge; but it may be, say,
when the ship has passed buoy #2 in the approach channel, or once the vessel has pass through lock
gates.[4]
If the charterer does not comply with the NOR, the carrier may cancel the contract and seek damages.[5] If
the charterer's delay means that laytime is exceeded, a predetermined penalty (i.e. liquidated damages)
called "demurrage" is incurred.[6][7] If the whole period of laytime is not needed, a refund called
"despatch" may be payable by the shipowner to the charterer. Despatch is normally paid at 50% of the
demurrage rate, but this depends on the terms of the charterparty. The ship may thus be able to leave
port early. Despatch does not normally apply to tanker charters.[citation needed]

References[edit]

1. ^ Laydays may be measured in days (or portions thereof), hours, or even tides.
2. ^ Maritime knowhow website: Gencon, clause 6 Archived 2011-04-04 at the Wayback Machine
3. ^ Maritime knowhow website: Notice of Readiness Archived 2011-07-14 at the Wayback Machine
4. ^ Maritime knowhow website: Gencon, clause 9 Archived 2011-04-04 at the Wayback Machine
5. ^ The Mihalis Angelos
6. ^ The Suisse Atlantique
7. ^ Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd

Additional Research
I also have some references in my text book “Law of International Trade” and will check through
those further.

itoyung assignemnt ko sa group and conclusion--1. The FOB contract between New Fads and
Bell

a. The implications of the FOB contract

b. The seller’s obligations

c. The buyer’s obligations

this is our group work in the university

New Fads Ltd, (the seller) agrees to sell computer components on “fob” terms to Bell Ltd., (the
buyer) a company based in Nigeria. Shipment scheduled for April, fob Liverpool. The following fax
was received from the buyer on 07 April: “We intend to nominate The Moyvale which will be
entering port on 13 April. Ship will be ready to load on 15 April”.

Owing to an oversight of an employee of New Fads Ltd (the seller) the fax was not brought to the
attention of New Fads Ltd. until the 15th April. It is uncertain if normal loading rate (specified in the
contract) will enable completion of loading before the expiry of the shipment period.

In the interim the goods are kept in a warehouse in Manchester. On 14 April a massive strike was
called by rail workers which paralysed the rail network.

Advise the parties to the fob contract.