NON-CREDIT CASE: HOW MUCH RISK FORWARD

    A dispute is worried Li Linhai, the deputy Secretary-General of Freight Forwarders Association, and Lao Yusheng, the general manager of Shanghai Yadong International Freight Co., Ltd. (hereinafter referred to as Yadong)

    This is an air transport dispute: Oriental commissioned by the Shanghai Jiahua Import & Export Trade Co., Ltd. (hereinafter referred to as Jiahua) transport a set of goods to New York by air. But as the result, they not only do not receive the freight, but also be prosecuted to court for  demanded compensation for loss of goods .

    Li Linhai think that, once Yadong failed, the the legal risks of freight forwarding companies  will greatly increase in the future, and the total air freight industry will be affected.

    Now, the Shanghai Changning District Court, already announced that Yadong have been losing the first instance ruling. "In future, the freight forwarding companies i will be confused n the business  operations." Hai worried.

    Forwarding is instituted

    Lao Yusheng said that in September 25, 1998, Jiahua commissioned Yadong transport a group of leather to New York in Air. The consignee name is United Enterprises Group Ltd. (Hereinafter referred to as UEGL) assigned by Jiahua, but the telephone belong to another company named PPW, while Jiahua sign PPW's mark code on the cargo packaging, packing list, declaration, export of goods Single copies and many other documents.

    When Yadong take the bill, he commissioned China Eastern Airlines to carry, and the goods safely arrived POD on October 2, SpeedMark, the United States agent of Yadong, notice the PPW by the phone number provided by Jiahua, and give the B/L to them.

    October 5, PPW have done customs declaration and got the good, by the "UEGLc / oPPW" commercial invoices provided by Jiahua, packing lists and other documents

    Subsequently, the Jiahua commissioned the Yadong and another freight forwarding, Huali global air transport company’s Shanghai branch (hereinafter referred to as Huali) deliver the same goods to the same consignee UEGL, with same contact number of PPW on Oct. 5, Oct. 21, Oct. 30 . Follow the same procedure, the consignor received the goods.

    4 months later, the Yadong and Huali issued to the transport invoices Jiahua, and Jiahua have no objection after receiving them.

    In February and March 1999, when Yahong ask for shipping costs fron Jiahua, Jiahua wrote to Yadong said that when the cargo transported to United States, there are series of disputes, and has caused huge economic losses to the company. When they deal the disputes, they will return the freight to Yadong company.

    April 1999, Yadong sue the Jiahua to pay freight in Shanghai Changning District People's Court. But Jiahua counterclaim Yadong"misplaced goods". The reason is that the UEGLis

    East Asia and the Ka Wah court to the bombarded with freight. But the plaintiff, he is a non-existent company in the United States, and Yadong is not possible to export the goods to UEGL, and ask Yadong companies more than 160 million for the damage of cargo.

    The Changning District Court in July 2001 first instance verdict, finds that Yadong "misplaced goods" set up, Yadong bear the main responsibility, take 75% of the cargo damage; Eastern airline take the part compensation that Yadong can not be liable for; Jiahua bear secondary responsibility take 25% of the cargo damage.

    For this decision, Yadong, Eastern airline, and Jiahua all plead not guilty, and appealed to Shanghai intermediate people's court . The case is still pending.

    The Huali is appeal Jiahua company for the same reason, and Jiahua take a counterclaim as "misplaced goods", the present case, is suspended in Changning court.

    In this regard, as the freight forwarding business, Yadong and Huali can not understand, and said: "the goods to the port of destination for freight pickup request is not the same, in the United States as long as notice the consignee, it is means they complete the obligation of forwarding , and  as long as the complete declaration, the consignee can pick up goods. we are innocent third party, if in this reasont to determine our responsibility is unreasonable. "

    But Jiahua Company believes that the Yadong company did not properly delivery obligation. First,the consignee designated by Jiahua dose not exist, but the Yadong company handed over bills to another company, and this is improperly delivered. In addition, when Yadong deliver the goods to consignee, he does not check the other part's identity documents or other proof, and not  provide certificate of receipt of UEGL to Jiahua, in violation of program delivery.

    How much risk forwarding take?

    Li Linhai told reporters that as the increase of foreign trade in recent years, the similar disputes between freight forwarders and cargo owner is increase more and more. In the past, they  appeared more in maritime areas. While the trial of this air dispute because of its representative on the fact and law aspects, have already significance beyond the case itself: if the judgments of this case have been the precedents in such cases, this will have an important impact on he freight forwarding industry for the future

    The case also raises China Freight Forwarders Association, the Shanghai Arbitration Commission, Shanghai Academy of Social Sciences Law Institute and a number of experts in the law firm's attention. Freight Forwarders Association have even decided to hold business seminar  to find ways. Liang Ruilin Shanghai Arbitration Commission, said: "If the second instance maintain the first instance decision, on the freight forwarding industry, there will be a serious blow, greatly increased the legal risk for freight forwarding industry,."

    Tian Jianwen, Beijing Civil Aviation Management Institute Professor, believes that the power and the risk for freight forwarding is not equal, and it is not beneficial to the development of freight forwarding business.

    However, the expert who asked not to be named, told reporters that the case is a somewhat strange, from the dispute between freight forwarding and cargo owners , it seems that some human factor in the obstruction.

    But regardless of whether there are the subjective elements of fraud in which, for the freight forwarding industry, indeed pay attention to such thing. Because in the situation that company manage have not reached the high degree of integrity, freight forwarding possibly meet this risk, whether such dispute is due to deliberately or intention.

    As a freight forwarding the most thing is to concerned about whether there is obligation to review the consignee?

    what is the delivery process?

    These had been agreed upon industry practices or procedures relevant provisions, have become blurred as the Court of First Instance's decision.

    Once the second instance upheld, Li Linhai think that the legal risk of freight forwarding industry will greatly increase.

    In fact, the focus of this dispute is: whether the freight side has fulfilled its obligations properly?whether the loss is caused by trade or transport ? ... ... And other areas of the law's key details.

    According to the materials provided by Shanghai Freight Forwarders Association, accordance with "Warsaw Treaty" and other laws in air, the consignor must take responsible for the correct of instructions on the documents, and the freight forwarding and carrier have no obligation for overview. If it make damage for carrier by the incorrect of materials, documents, instructions, and statements, the consignee should bear the responsibility. The freight forwarder and carrier transport the goods following the instruction information, if there are damages, the consignee should bear the responsibility, and freight forwarder and carrier are not involved

    For other relevant rights and obligations, there are corresponding provision to be expressed.

    Related to import and export trade, for the applicable law, whether use the general international conventions or domestic current existing legal provisions?

    The experts are still controversial. In the current air transport industry, in addition to the "Warsaw Convention" and "China Civil Aviation" ,there is "China Civil Aviation rules of international transport of goods."

    Li Linhai said that, since China is still no specific law for international freight forwarding, currently we only in accordance with freight forwarding industry practice and international General evidence and the instructions. So once there are a dispute, you can not very well accord to the law.

    Some details of this dispute must be analysis in law, and some news said that the court is still disputing on second instance. Because of the representative of this case, the court also seems very cautious, by the now, there are no conclusion on it.