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Copy of Reverse Logistics

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maria tirado

on 2 April 2014

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Transcript of Copy of Reverse Logistics

(Value of exports/imports)*100

If lower than 100%, capital is going out

If higher than 100% capital is being made

Transportation and Logistics
CISG Article 9 (2)
St. Paul Guardian Insurance Company V.
Neuromed Medical Systems & Support
Maria Tirado, Mahla Azkabari, Mario Izzo,
Adam Buchanan, Jia Luo and Corrado Tropiano

Founded in 1919.

Located in Paris, France.

Serving many businesses and promoting international trade.

Now consists of members from more than 130 countries.

Logistics involve detailed coordination of a complex operation
that involves people, facilities and goods.
Contracts are used between parties
Sinking ships
Well known law that contains rules to transport goods in many different countries
England has dominated transporting goods by sea in the 18th and 19th centuries
Used in the following countries before they separated from the British Colony
United States
South Africa
(International Chamber of Commerce)
Terms of Trade (TOT)
The quantity of goods and services that a country can purchase from proceeds of the sale of goods and services of a given quantity
“The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.”
States the responsibilities of the buyer and the seller.
- Shipping
- Clearing goods to be exported
- Loading and unloading
Air Waybill
Hague-Visby Rules
Set of rules that apply to buyers and seller that transport goods by sea
Following INCOTERMS apply:
FAS (Free Alongside Ship)
FOB (Free on Board)
CPT (Carriage Paid to)
CIP (Carriage and Insurance Paid to)
DES (Delivered Ex Ship)
DAF (Delivered at Frontier)
DDP (Delivery Duty Paid)
Used to transport goods by air
Bill covers the following
Contract of carriage
Evidence of receipt goods
Freight bill
Certificate of insurance
Customs declaration
INCOTERMS that apply to this bill
FCA (Free Carrier)
CPT (Carriage Paid to)
CIP (Carriage and Insurance Paid to)
Neuromed (USA) vs St. Paul Guardian Insurance Company (Germany)
Cost, Insurance and Freight
Convention of contracts for the International Sale of Goods
Damaged MRI during its transit from Germany to USA
The insurance company appealed to the court regarding the risk of loss in CIF, as the delivered MRI was in damaged condition when it arrived at final destination
Responsibility of
risk of loss
regarding the damaged MRI
Interpretation of
CIF terms
incorporated in the sales contract
The court's
initial reaction
was to assert the accurate statement of German law for the defendant
Consequently, St. Paul Guardian Insurance company
Neuromed Medical systems
Applicable Law
The parties agree that CISG
governs this case because:
1. Both USA
(Insurance company as subrogees of Shared Imaging)
and Germany
are Contracting States of CISG
2. Neither party explicitly chose to
opt out of the CISG
in their contract provision
Therefore, German courts uphold application of CISG as the law of the designated Contracting State
- Passing of risk at the "CIF New York Seaport"
2. The Passage of Risk of Loss and Title, INCOTERMS and the CISG
Defendant Argument
Because the delivery terms were "CIF New York Seaport", its contractual obligation, with regard to risk of loss or damage, ended when it delivered the MRI to the vessel at the port of shipment
Plaintiff Argument
Generally accepted definition of CIF term as defined in INCOTERMS 1990 is inapplicable in this case, because the contract fails to specifically incorporate them.
Plaintiff's legal expert acknowledges that the German Supreme Court concluded that a clause "fob" without specific reference to INCOTERMS was to be interpreted according to INCOTERMS "simply because the INCOTERMS include a clause "fob"
Court Holding
Thus, pursuant to CISG 9(2) INCOTERMS definition shoud be applied to the contract despite the lack of an explicit INCOTERMS reference in the contract. Accordingly, Neuromed (defendant)'s motion to dismiss the complaint should be granted and the complaint dismissed

Plaintiff Argument
Other provisions of the contract are inconsistentwith the CIF term because Neuromed, retained title subsequent to delivery to the vessel at the port of shipment and thus, Neuromed manifestly retained the risk of loss
Court Reasoning
INCOTERMS only address passage of risk not transfer of title
Under the CISG, the passage of risk is likewise independent of the transfer of title
CISG does not govern and therefore the passing of ownership is not regulated by the CISG according to article 4(b)
Plaintiff's legal expert mistakenly asserts that the moment of "passing of risk" has not been defined in the CISG. Chapter IV of CISG, entitled "Passing of Risk" explicitly defines the time at which risk passes from seller to buyer pursuant to article 67(1)

Court Holding
Accordingly, pursuant to INCOTERMS, the CISG and specific German law, Neuromed (defendant)'s retention of title did not there by implicate retention of the risk of loss or damage
Important Facts to be considered:
1. CIF - Expression vs Implication
2. Careful study of CISG
3. Hire a professional legal expert
Effort Shipping Co. Ltd. V.
Linden Management S.A.
Quantum Corp. V.
Plane Trucking Ltd

Whether international convention for carriage by road applicable to contracts for multi-modal carriage
Whether international convention for carriage by road applicable where carrier retains option to substitute different mode of carriage
In September 1998 Air France made a deal with the applicants, Quantum Corporation, which issued an air waybill in Singapore, providing for the carriage of hard disk drives which the value of product is US$1.5 million. The Air France delivered hard drives from Singapore to Dublin. The planned routing was by air from Singapore to Paris and then from Paris to Dublin by road and sea over the Irish Sea. This was recorded in the master air waybill.

A large number of similar consignments involving the same parties had been carried in this way earlier. For the trucking transportation, the carriage was performed by regular contractors of Air France the name is Plane Trucking. Although the cargo was in the UK, in the safekeeping of Plane Trucking, it was stolen by their employees. Plane Trucking admitted liability for the theft but was in liquidation at the time of the proceedings.

Plane Trucking’s liability insurers had purported to avoid the policy. Air France also accepted liability.

Whether the contract to which Air France was a party was a contract for the carriage of goods by road
Whether the contract specified a relevant place of taking over the goods
Whether the Warsaw Convention was incorporated by contract
Whether Plane Trucking was able to rely on the same liability as Air France by reason of cl. 7 on the reverse of the air waybill
The issues would be addressed on the basis that this was a single contract for the carriage from Singapore to Dublin, that carriage by road from Paris to Dublin was the intended mode of performance when the contract of carriage was made but that Air France was not contractually obliged to carry the goods in that manner and might if they so wished have carried the goods on that leg by air
While Air France accepted liability, it claimed entitlement to limit its liability to the amount of SDRs 17 per kilo, in agreement with its General Conditions of Carriage by Air for Cargo. Air France kept that its General Conditions were incorporated into the contract of carriage by means of terms in the air waybill. Under Article 11.7 of the Air France conditions, its liability was limited to the amount of SDRs 17 per kilo. Unlike the Warsaw Convention, the conditions did not disentitle Air France from relying on the per kilo limitation in the event that the loss ‘resulted from an act or omission of the carrier, his servants or agents, done with intent to cause damage, or recklessly and with knowledge that damage would probably result.

Plaintiffs maintained that
Air France’s liability, in relation to the Paris-Dublin transportation, was subject to the Convention on the Contract for the International Carriage of Goods by Road (‘CMR’). Article 1 of that Convention provided that the Convention applied to ‘every contract for the carriage of goods by road in vehicles for reward, when the place of taking over of the goods and the place designated for delivery, as specified in the contract, are situated in two different countries, of which at least one is a Contracting country.’ France is a contracting country to the CMR Convention.

For the purposes of the Convention the plaintiffs submitted that the goods were taken over in Paris. Under Article 23 of the Convention, the carrier may limit its liability to SDRs 8.33 per kilo of the goods lost or damaged. Under Article 29 of the Convention, however, the carrier is not entitled to take advantage of the limit set out in Article 23, where the loss or damage was caused by its willful misconduct or that of ‘the agents or servants of the carrier, or any other persons of whose services which the carrier makes use for the performance of the carriage’
The judgment of the court that defined the issue to be addressed as "what constitutes a ‘contract for the carriage of goods by road’ within the meaning of Art.1 of CMR
He accepted that the issue could be approached on the assumption that although carriage by road from Paris to Dublin was Air France’s intended mode of performance, Air France were not contractually obliged to carry the goods in that manner and, might, if they had so wished, have carried the goods on that leg by air
The contract recorded in the air waybill was clearly for two legs, the first to be performed by air, the second a trucking leg, unless Air France elected to substitute some other means of transport – as their Conditions permitted
Accordingly the judge did not need to consider any issues arising under Article 29 of the CMR Convention and found that, subject to an additional point which was not before the court, Air France was entitled to limit its liability for the loss to 17 SDRs per kilo, in accordance with Article 11.7 of its General Conditions of Carriage.

Effort Shipping Co. Ltd
contracted The “Giannis NK” to transport a shipment of groundnuts from Senegal to the Dominican Republic. Unknown by all parties the shipment was infested with khapra beetle that in turn rendered the “Giannis NK” and its cargo subject to exclusion from countries where the cargo was to be discharged. The groundnut cargo was eventually dumped overboard, along with a cargo of wheat. Upon the vessels arrival in San Juan, more fumigation was required and there was a further delay accumulating to two and a half months until the vessel was cleared to load again.

The purpose of the Hague Rules was to establish a standardized set of definitions and rules to govern the terms and conditions used in ocean bills of lading

Dispute between shippers and
carriers on the point of liability for the shipment of dangerous goods has been the subject-matter of much controversy , the question arises as to who should bear the risk?

- Article IV, r. 6 of The Hague Rules

- Article IV, r. 3 of The Hague Rules

- Sections 1 & 2 of the Bills of Lading Act 1855
Article IV, r. 6 of The Hague Rules
"Goods of an inflammable, explosive or dangerous nature to the shipment whereof the carrier, master or agent of the carrier has not consented with knowledge of their nature and character, may at any time before discharge be landed at any place, or destroyed or rendered innocuous by the carrier without compensation and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any."
-Article IV, r. 3 of The Hague Rules
- Sections 1 & 2 of the Bills of Lading Act 1855
Sections 1 & 2 of the Bills of Lading Act 1855
"Whereas by the custom of merchants a bill of lading
of goods being transferable by endorsement the property in the goods may thereby pass to the endorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner, and it is expedient that such rights should pass with the property . . .

Every consignee of goods named in a bill
of lading, and every endorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.
Nothing herein contained shall prejudice or affect any right of stoppage in transitu, or any right to claim freight against the original shipper or owner, or any liability of the consignee or endorsee by reason or in consequence of his being such consignee or endorsee, or of his receipt of the goods by reason or in consequence of such consignment or endorsement."
The House of Lords unanimously dismissed an appeal by the shippers Effort Shipping Co. Ltd against High Court and Court of Appeal rulings ordering them to pay the carrier Linden Management S.A (The “Giannis NK”) $477,848 in damages
The ruling enforces that the shippers (Effort Shipping Co. Ltd.) are liable for damages to the carrier (Linden Management SA (The “Giannis NK”)) caused by the “dangerous nature” of their cargo by The Hague-Visby Rule Article IV, r.6, r.3. & the Bills of Lading Act 1855 (sections 1&2).

In hopes to eliminate the occurrences that result in timely & costly resolutions. The first step for both parties would to conduct a legal risk management plan for every contract. The plan would consist of identifying, evaluating the probability & severity of loss, & reducing, transferring & eliminating the risks as much as possible.
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