International Trade Law

Order Description

Question You act on behalf of Phoenix Ltd., a London company, which sells televisions to retailers in London. In September of this year, Phoenix Ltd. entered into a sale contract with Forma Inc., a Taiwanese corporation, for the purchase of 250 televisions. The contract was made when Mr So, Phoenix Ltd’s Trade Manager, met Mr Lin of Forma Inc. at a conference held at that London Convention Centre. The sale contract was for: c.i.f. London; 250 Taiwanese HD4 50” flat screen televisions; Quality: A1; Condition: Good, Shipment: November 2017 in container stuffed by suppliers; Price: US$ 900.00 per television payable 20 days after Bill of Lading date; Payment to be made in cash into Forma Inc.’s bank account in London against the following documents: (i) Original Bill of Lading; (ii) Invoice; (iii) Policy or Certificate of Insurance; (iv) Certificate of Quality signed by two Independent Inspectors. It is understood that Forma Inc. bought the goods from another seller (Wei-ning Inc.) and then sold them on to Phoenix Ltd. On 27th November 2017, Forma Inc. tendered documents to Mr So under the sale contract. The following documents were presented: Bill of Lading. Shipper: Wei-ning Inc; Consignee: Forma Inc. or Order; Port of Loading: Keelung, Taiwan; Port of Discharge: London; Vessel name: Success; Description of goods: 1 x Container s.t.c. 250 Taiwanese HD4 50” flat screen televisions; Dated: 23rd November 2017, Keelung; Signed by the Master “for the Carrier.” Endorsed on the back: “Forma Inc to the order of Phoenix Ltd.” Invoice. Seller: Forma Inc; Buyer: Phoenix Ltd; Description: Cif London, 250 Taiwanese HD4 50” flat screen televisions in 1 container at US$900.00 per television; Amount: US$ 225,000.00. Payment cash against documents. Payment into Forma Inc.’s bank account in London; Payable 20 days after bill of lading date.
© Richard Holt 2017
Lloyds Certificate of Insurance. Certificate that there has been deposited with the Committee of Lloyd’s an Open Cover effected by Lloyd’s Brokers, acting on behalf and of Wei-ning Inc. with Underwriters at Lloyd’s, dated the 10th day of September 2017, and that the said Underwriters have undertaken to issue a Policy of Marine Insurance at Lloyd’s to cover, up to US $15,000,000 in all by any one steamer, Taiwanese HD4 50” flat screen televisions to be shipped on or before the 30th day of November 2017, from any port or ports, place or places in Taiwan to any port or ports, place or places in the World and that Wei-ning Inc. are entitled to declare against said Open Cover the following shipment: Conveyance: M/V Success, From: Keelung, Taiwan; To: London; Insured Value/Currency:US$300,000; Interest: 250 Taiwanese HD4 50” flat screen televisions; Cover: Institute Cargo Clauses (A); Underwriters agree losses, if any, shall be payable to the order of Wei-ning Inc. on surrender of this Certificate. Dated: at London, 28th October 2017. Certificate by Hsu Inspection Services of Taiwan. Date: 22nd November 2017; Certified: “Today, as instructed by Wei-ning Inc., we inspected 250 Taiwanese HD4 50” flat screen televisions at the warehouse of Wei-ning Inc. The televisions were in good condition. We saw them loaded into a container of good condition. The container was then sealed by the shipper’s representatives”; Signatures: Ko An and Andy Chen, both described as “inspectors”. Phoenix Ltd. still have the documents in their offices. Forma Inc. have said that they are expecting payment from Phoenix Ltd. Phoenix Ltd. have heard that on 28th November 2017, the “SUCCESS”, whilst on the high seas, sank. This was due to an unexpected typhoon which was of unprecedented strength. While all the crew were saved the ship and cargo have been lost. It is understood that the “SUCCESS” was owned by Success Ships Inc. (a company incorporated in Panama) at the relevant time. Phoenix Ltd. contacted Success Ships Inc. and were told that the company, due to the sinking, has entered into liquidation as it has significant debts which far exceed its assets. Phoenix Ltd. understand that to buy replacement goods of the same or similar specification would cost US$1,125 per television inclusive of delivery to London. Advise Phoenix Ltd. generally. Phoenix Ltd. are particularly worried that any defendant will attempt to bring proceedings in their home country for a declaration that they are not liable for any losses. Is there anything that can be done about this? Assume the date of your answer is 30th November 2017.