UK International Trade Law Case Research Report

Report Context and Guidance

Imagine you are working for the Senior Partner of the law firm. You are assisting on a large case. Imagine, the Senior Partner was appointed as Expert to give her views on all aspects and relationships, as the parties hope to solve the matter on the basis of his advice out of court, if at all possible.
The Senior Partner had given you some pointers and some part explanations and her interim views and after the initial briefing with her, your notes compare to those Points of answer/issues. She tasked you with detailed research on all aspects of the case and a report on the explanations and advice to be given to all the parties. The Senior Partner stresses that she only gave you a few cases as a starting point and that there is more case law on these and other aspects, which she wants you to find, explore and explain; similarly with other aspects of the law. She has expressed her initial views, but she wants you to question them in your research and to present an informed answer, looking at all sides of the argument to ensure that the final report is clear, based on in-depth research and giving detailed advice on all arguments with clear explanations to the parties. She also wants you to draft the final statement as to the solutions the parties should adopt in full settlement of their differences.
The draft should be in a form that she can use it, as is, as her expert advice.

Guidance:
Your essay is, in effect, a detailed research report which is to support convincingly the approach and solutions in your advice to the parties.
Note, you will not get any points for repeating the Points of answer or their bare content, but only for the depth and clarity of analysis and explanation with which you apply the law to the facts beyond the framework given, based on detailed legal research which is clearly evidenced.

The Brazilian Wandering Spider

Fruit wholesaler Vitamin (V) with place of business in Edinburgh made a sale contract with its longstanding business partner the Brazilian banana grower Samuel (S). The contract was for 3 tonnes of bananas of good quality, free from infestation, packaged in boxes of approx. 15 kg each, cif Edinburgh. Quantity, quality and freedom from infestation to be certified by an independent inspector. Certification to be final and binding on both parties, except in case of fraud or manifest error. English law is to apply to the sale contract.

Samuel contracted with the Brazilian freight forwarder Fast & Clever (F&C) under BIFA 2005A Freight Forwarding Terms (see: http://www.bifa.org/_Attachments/Resources/1105_S4.pdf) to organise the inspection and certification as well as the land transportation of the goods with a refrigerated vehicle from the plantation near Itaiba to the Port of Recife for shipment with the English sea carrier Carefore (C) to Grangemouth in Scotland. S had already pre-booked the ocean carriage with C, from the Port of Recife to Grangemouth in Scotland on the terms of a BIMCO LINEWAYBILL 2016 (see file:///C:/Users/slblack/Downloads/Sample%20copy%20LINEWAYBILL%202016%20(1).pdf; a copy is also provided on LEARN).

F&C had collected the goods by lorry themselves through one of their employees, who accidentally forgot to switch on the refrigerating unit, so that the bananas were transported and stored for two days without cooling, at a daytime temperature of up to 30 Degree Celsius. On arrival at the port, the bananas were inspected by Issue (I), an independent inspection agency selected by F&C, and thereafter consolidated and packed, as per instructions, into one of Cs refrigerating containers. However, at the port it was rumoured that the representatives of F&C and I who met at the port for the purposes of the inspection were old friends who usually spend their time drinking together rather than looking too closely at the goods. The refrigerated container including the bananas was put on board the seagoing vessel The Steamer and transhipped by stevedores in Rotterdam onto the feeder vessel The Sprinter. The waybill, which was issued by agents of C for C as carrier to S as shipper and consignor, showed 200 boxes of bananas to be shipped in good order and condition from Recife to Grangemouth.

S insured the goods for the transit with the Brazilian Insurance Company Lloud under an Institute of London Underwriters Companies Marine Policy and Institute Cargo Clauses A, from Itaiba to Grangemouth. The waybill, invoice and insurance certificate were sent to V, who, on receipt of the documents, accepts, signs and dates the bill of exchange (incorporating the application of English law) drawn on him by the seller, payable 20 days after sight and sends it back to S to facilitate payment of the purchase price.

When V comes to port of Grangemouth to collect the goods, V discovers that the bananas have been fumigated along with all other cargo on board The Sprinter. During the transhipment the container with the bananas and other fruit had been struck by the lifting fork of a gantry crane, damaging the doors which, as a result, no longer sealed. Through the gap caused by the damage spiders had escaped and it transpired that it was the bananas that were infested with them. The master of the vessel feared this to be the dangerous and venomous Brazilian Wandering Spider and informed the authorities of the infestation who ordered the fumigation of vessel and cargo, causing damage to most of the cargo and 3 days delay to the vessel.

Carrier C demands from V payment of the costs of fumigation of the vessel and its cargo, damages for the 3 days detention due to the shipment of dangerous cargo and loss or damage to other cargo aboard The Sprinter. V denies liability for the damage and refers C to S as the shipper.

On further inspection, V also discovers that the bananas are too ripe for its purposes of selling them as fruit in shops and that they had been packaged in boxes of between 12-17 kg each, which would make it very difficult to supply the correct amount to its customers. In any event, the bananas having been fumigated are unsuitable for human consumption.

V therefore does not take delivery from C and rejects the goods as against S. Due to this very poor performance by S V requires S to return the accepted bill of exchange. C discharges the bananas and hands them into storage at the local warehouse.

S argues that it had fulfilled its duties under the sale contract and was therefore not answerable for any problems thereafter. It certainly did not accept Vs rejection of the goods as valid and demands that the bill of exchange is honoured. Indeed the fruit had been delivered and the inspection certificate had attested freedom from infestation, the right quantity and good quality at the time of delivery to the carrier. That was all that mattered. In any event, the master of the ship had overreacted, as there were only harmless spiders on its plantation. The Brazilian Wandering Spider had last been sighted there 10 years ago. This fact could indeed be independently verified. It was therefore the carrier who should pay for damage to the bananas which was caused due to its master overreacting. S opines that even if V was held liable, the consequences of this incident should be covered by the cargo insurance policy as general average contributions.

V argues that the inspection certificate is clearly wrong, possibly even fraudulent, as the infestation was discovered on the feeder vessel, which was clear evidence of breach of contract. V also rejects the claims by C that it was liable to reimburse C for any of the damages arising from or expenses caused by the shipment, whether as deliveree named in the waybill or as merchant by means of the waybills merchant liability clause. In any event, it was no longer liable since it had rejected the goods. In turn however, V wants to sue the inspection agency I for damages due to losses of profit on its on sales and the loss of its time at the port, which it would not have incurred had the inspection certificate stated the true facts.

S wants to sue the careless stevedores for the damage to the container and thus its goods; without the stevedores negligence, S argues, no problems would have arisen. It also contemplates suing Lloud, F&C and I for any losses in case V could validly reject the goods.

S had negotiated the bill of exchange to Seller Bank and, on maturity, the bank now seeks payment from V of the value enshrined in the bill of exchange. V wants advice whether it can validly dis-honour the bill of exchange.

Advise all parties as to their respective rights and liabilities and suggest any actions they should take.
The parties also wish to know whether the English courts would have jurisdiction to decide each of the claims.