Adv. Gill Nadel, Keydar Halali
Many International forwarders give their clients (importers, exporters) credit so that they can manage their fluent activities. From time to time the credit given grows, and the client fails to pay his debts back on time, which leads the forwarder to take various steps, among them to request (the court) to seize the clients assets which are in the hands of a third party. Such a case was brought recently to the Magistrate Court of Rishon Le’Zion
The facts of the case:
An international forwarder and his client, an agricultural exporter, signed a contract giving the exporter credit of up to 500,000 NIS, and based on the exporter’s commitment, the forwarder gave the exporter forwarding services and financed the transportation of his cargo to different destinations abroad. After a while during which there was cooperation between the sides, the exporter owed the carrier a substantial sum of 915,000 NIS, including interest as agreed on.
In light of this, the forwarder filed a lawsuit to court for the unpaid debt and requested to seize the monies which the exporter is supposed to receive from third parties, until the main action will be settled. The court gave its consent and ordered a seize order which led the exporter to file a request to cancel it.
At the time of the courts decision many questions arose, such as what are the chances of the main claim, or what are the chances of burden (in other words, how hard will to implement the final verdict, if a seize will not be ordered straightaway) and how much weight will be given to considerations such as balance of convenience and good faith.
The claims of the parties:
On the matter of the chances of the case (to win) and the issue of the existing debt, the exporter claimed it was the forwarder who acted unprofessionally, as the cargo had an expiry date, and it was he who loaded the cargo onto ships that sailed long periods of time (more than usual) in unprofessional manner. Also the exporter claimed the expenses charged were higher than what was formerly agreed between the sides.
In opposition, the forwarder claimed that according to the contract between them he is not responsible for the arrival dates (of the cargo), and that the payments were charged by their agreement.
On the matter of the balance of convenience, the exporter claimed that the request to seize (the cargo) was submitted (to court) after a long time, without good faith and with intent to cause him great damages, purposely during growing season.
The court’s decision
On the matter of the chances of the case, the court ruled that as both sides relied on the forwarder’s quote, (therefore) it is fair to say that at this early stage the chances of the claim are not low.
On the matter of burden, the court ruled that it was indeed proved that the exporter had no assets under his name and that all his assets were mortgaged by the bank or third parties. Also it was noted that the exporter did not hand in an up to date report on his financial situation, and this led (the court) to fear that not allowing the seize to go through at present will sabotage implementing the court’s verdict later on.
On the matter of the balance of convenience and (acting out of) good faith, the court accepted the forwarder’s claim that he did not detain the cargo for an unreasonable period of time, and he did not act out of vengeance. The court further ruled, that voiding the seizure would do more damage to the carrier than to the exporter, if indeed it remains as so.
Eventually the court rejected the exporter’s request to void the seizure and charged the exporter with the legal expenses of 6000 NIS.
C.F. (civil file) (Rishon Le’zion) 22553-11-10, Judge Iris Arbel – Assel, decision given on 23.1.11, names of parties not mentioned)
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