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Saturday, September 7, 2013

Carriage of goods & Marine Cargo Insurance : What constitutes delivery ?

Cargo Transport : Carriage & Insurance :  What constitutes delivery ?  ::-  is it physical unloading of goods or mere submission of documents or something much more !!

In the sport of Cricket, a delivery is the ball that has been bowled – the single action of the ball being hurled towards the batsmen.. in Marine cargo movement, it is much more complex and technical… In any cargo movement, there may not be a Buyer – Seller relationship; the goods may not be  insured  - but most likely there would be a transport contract i.e., the agreement between the consignor and the carrier [again there could be exceptions where the owner of the goods also might be the Carrier !]

The duration clause in the Inland Transit clause (A/B] would read that - 

 “  ** This insurance attaches from the time the goods leave the warehouse and/or the store at the place named in the policy for the commencement of transit and continues during the ordinary course of transit including customary transshipment if any
i.          until delivery to the final warehouse at the destination named in the policy or
ii.         in respect of transits by Rail only or Rail and Road, until expiry of 7 days after arrival of the railway wagon at the final destination railway station or
iii.       in respect of transits by Road only until expiry of 7 days after arrival of the vehicle at the destination town named in the policy
---------------------------    whichever shall first occur.**  ”

What constitutes delivery has been the subject matter of discussion and litigation in many instances !

Going by the Carrier Act of 1865 – the liability of the common carrier commenced from the moment of acceptance of goods either by them or by their authorized agents.  An implied acceptance was construed to have taken place the moment they permit the goods to be placed at the usual place of storage.

Upon acceptance, the carrier becomes charged with the responsibility of safe carriage to the destination and discharging them safely.  The Carrier had to fulfill this responsibility even if the route were to become expensive and unprofitable for them  due to any alteration of circumstances beyond their control.  The responsibility would begin with the receipt of goods and not with the commencement of transit and would end by carriage to the place of destination and providing consignee a reasonable time for taking away the goods.  What would constitute “reasonable” is always a ‘question of fact’ pertinent to each case….. and the point of delivery would also be determined by the contract of carriage terms – whether at the place of the consignee or the place of the carrier !

If the goods remain at the custody of the Carrier after such reasonable time pending consignee taking them away, after expiry of such reasonable period, the Carriers ceases to be a carrier but becomes a custodian of the cargo akin to a bailee.

What is stated above and sought to be emphasized above, is the position of the Carrier and that should not alter the liability or the extent of the liability of an Insurer….

In India the document (thought not a standardized one) issued by the Road  carrier is known as ‘Lorry Receipt (LR)’ and sometimes as Goods consignment Note (GC);  elsewhere is it called Waybill or Consignment note or CMR note.  By whatever name, it the document evidencing the contract between the Carrier and the entity entrusting the goods and is not a document of title.   In Europe, it is CMR – for there is the Convention on the Contract for the International Carriage of Goods by Road -  an United Nations convention signed in Geneva on 19 May 1956.   The terms and conditions pertaining to transportation of cargo by road stands ratified by all European countries  and some outside Europe such as Lebanon and Iron.  The CMR waybill reportedly is a standard document.

More of that and on the liability of the Carrier according to CMR and based on a judgement in Nederlands in another post……………

With regards – S. Sampathkumar.
18th Aug 2011. 

1 comment:

  1. Dear Sampath,
    Thank you for writing interesting blogs on marine insurance. They are food for my thought.
    With regard to delivery, I came across a case where the brief facts are as follows -
    A truck driver reaches the gate of the destination point at night, and the security guard asks him to wait until dawn - when the concerned staff would arrive and allow entry of the truck into the premises. After about 2 hours, the truck driver changes his mind and takes a 'u turn'. He disposes off the cargo (known best to him), abandons the truck.
    In your opinion does this not constitute delivery - trigerring a claim under a marine policy?