Cargo disputes
Cargo Disputes: Lesson 1-Overview
When a party ships goods by sea, there are two main contracts that will be involved: (1) the underlying sale contract; and (2) the contract of carriage to transport the goods from A to B. Either the buyer or the seller will organise the contract of carriage, but the carrier might end up in a dispute with either of those parties, so both buyer and seller want to be able to have privity of contract with the carrier. The following diagram shows how that happens.
The diagram also shows what happens at the financial level. A buyer thousands of miles away from a seller doesn't want to run the risk of non-delivery of the goods (or documents representing title to the goods), so they frequently use banks as intermediaries who give cross-undertaking to each other, which makes the process more secure (although not always!).
Because this diagram has lots of moving parts, we recommend you download the dynamic PowerPoint presentation below as well as look at this static diagram. It talks you through each stage.
overview powerpoint (dynamic)
overview powerpoint
(Static)
WEt shipping
The phrase "wet shipping" is used to denote litigation relating to the issues happening to the physical ship. Examples include: collisions, grounding, sinking, pollution etc.
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Let's take these in turn.
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Collisions
When two vessels collide, there is normally damage to both vessels and either one or both vessels are likely to blame the other (to varying extents).
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When this happens typically one or both parties will issue a claim. In E&W the Admiralty Court has jurisdiction for wet claims. It is a peculiar Court which is subject to particular forms and practices, which can be found in CPR PD57AC and also the Commercial and Admiralty Court Guide.
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When a claim is threatened and/or issued the defendant is likely to bring a "limitation claim" to limit their liability for damage to third parties. This is possible under the Convention on Limitation of Liability for Maritime Claims 1976 ("the LLMC").
The LLMC is an international convention to which the UK (and many other countries) are signatories.
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