Seafreight Challenges Explored: Legal Aspects of Container Detention

1. AFIF 2004 Annual Conference 19 - 21 May 2004 Seafreight Challenges Explored:Legal Aspects of Container Detention Peter McQueen, Partner, Blake Dawson Waldron Lawyers

2. Overview • MISC v VISA decision • Interrelationship of Parties • Container Release Form • Conclusion

3. MISC v VISA • MISC carried containers which it supplied inbound to Australia • VISA was named as “consignee” in MISC ocean documents • VISA had issued house documents naming its customers as “consignee” • VISA’s customers unpacked containers at their own premises

4. MISC v VISA • Cl. 13(4) of MISC ocean document states: “If the Containers supplied by... the Carrier are unpacked at the Merchant’s premises, the Merchant is responsible for returning the empty Containers... within the time prescribed. Should a container not be returned within the prescribed time, the Merchants shall be liable for any demurrage, loss or expense which may arise from such non-return.”

5. MISC v VISA • Cl. 1 of the MISC ocean document states: “’Merchant’ includes the Shipper, Holder, Consignee, Receiver of the Goods, any person owning or entitled to possession of the Goods or of this Bill of Lading and anyone acting on behalf of such person.”

6. MISC v VISA • Containers were not returned to MISC within prescribed time and container demurrage accrued • MISC commenced Court proceedings to recover • VISA denied that it was liable to pay demurrage, arguing that as containers were not unpacked by it, it was not responsible for demurrage

7. MISC v VISA • MISC argued that, as VISA fell within definition of “Merchant”, VISA was liable for demurrage, notwithstanding fact that containers were not unpacked at its premises

8. MISC v VISA • MISC argued that use of “Merchants” in second sentence meant that anyone who fell within definition of “Merchant” is liable to pay demurrage • The Court found in favour of VISA stating that “Merchants” refers only to merchant at whose premises container is unpacked

9. Interrelationship of Parties Claims under contract of carriage Australian Forwarder Ocean Carrier Claims under contract of carriage/trading conditions Ultimate Consignee

10. Container Release Form • AFIF has developed a Container Release Form to be used to promote discussion • Container Release Form will create a contractual obligation upon ultimate consignee to shipping line to pay container detention charges to shipping line

11. Container Release Form Claims under contract of carriage Australian Forwarder Ocean Carrier Claims under contract Container Release Form Claims under contract of carriage/trading conditions Ultimate Consignee

12. Container Release Form • Addressed to shipping line • Signed by / on behalf of ultimate consignee • Nominates: • container(s) of shipping line • off hire date • depot for return

13. Container Release Form • Ultimate consignee agrees: • to return containers to depot by off hire date • to pay charges resulting from failure to so return

14. Conclusion • Check container detention provisions in: • contracts of shipping lines • contracts of principal forwarders • own conditions of trading • Consider practicality and effectiveness of introduction of Container Release Form

15. AFIF 2004 Annual Conference 19 - 21 May 2004 Seafreight Challenges Explored:Legal Aspects of Container Detention Peter McQueen, Partner, Blake Dawson Waldron Lawyers