Attorney Gil Nadel, Attorney Omer Wagner
The Supreme Court recently confirmed that a forwarder that released merchandise without being presented with an original bill of lading will bear responsibility for resulting damages.
The Supreme Court confirmed the verdicts that were given in the District and Magistrates Courts, which charged the forwarder with compensation fees of over one million NIS for resulting damages.
This case had to do with a lawsuit submitted by a British exporter against an Israeli forwarder/Customs agent. The exporter claimed to have sold a shipment of metal to an importer in Israel but the forwarder/Customs agent allowed for the cargo to be released without the importer presenting an original bill of lading and without the shipment being paid for. Therefore, the British exporter claimed this was negligence on the part of the forwarder/Customs agent and they must be held accountable.
The case:
The Special Metals Wiggin company of England exported a shipment of metal under FOB conditions from England, and the merchandise was destined for Ashdod Port. The buyer had agreed to pay CAD- cash against document- that is, the importer would have to pay for the goods upon receiving the original documents that are necessary for releasing the merchandise. These original documents would be given to the bank and the bank would hand over the documents only after the importer/buyer would make the payment.
According to the claim made by the seller from England, the shipment arrived in Israel, and the forwarder/Customs agent released it to the importer without the importer presenting an original bill of lading and without the importer paying for the shipment, and this is an act of negligence on the part of the forwarder/Customs agent which is cause for legal action. According to the claim, the original bills of lading were returned by the bank to the exporter in England after they were not claimed by the buyer.
The lawsuit was for approximately one million NIS which includes the value of the goods along with the seller's cost of collection from the buyer which had failed.
The forwarder/Customs agent made a claim for a statute of limitations of one year, as customary in lawsuits against marine carriers, and furthermore claimed that there is no contractual bond between him and the British exporter and that he had represented the buyer. Furthermore, he claimed that the buyer had presented him an original bill of lading, which had apparently been forged. In addition, he claimed that since ths was a shipment under FOB conditions, the ownership of the merchandise had been transferred to the buyer in Israel from the moment it was loaded.
The decision:
The Magistrates Court of Tel Aviv accepted this lawsuit in September 2011, rejected the claims made by the forwarder and charged the forwarder with compensating the exporter at a sum of more than one million NIS.
The Magistrates Court had determined, among other things, that an international forwarder is not entitled to a reduced statute of limitations of one year, since he is not a carrier.
In addition, the Magistrates Court determined that even thought the deal was under FOB conditions, this does not determine the question of ownership over the goods, it is only relevant regarding the risk of damage.
The forwarder did not accept this bitter decree, and after his appeal was deferred by the District Court in early September 2012, primarily on the grounds that these findings were based on fact and there was no cause to interfere with them, he appealed to the Supreme Court.
In his appeal to the Supreme Court the forwarder claimed entitlement to a reduced statute of limitations, and furthermore claimed that the British exporter should have taken measures to diminish his damages. In addition, the forwarder claimed that there was no chance to implement a rule known as "the matter speaks for itself" when the original bill of lading where in exporter's possession. According to this rule, when damage is inflicted, a certain party is entitled to claim that the damage had been inflicted while the cargo had been in someone else's possession, and he lacks precise information regarding the manner in which the damage had occurred, and thus, the task of proving the damage must be transferred to the "other".
The Supreme Court determined that the Courts' initial had been correct in their ruling, because this was the third phase of this appeal, and this was not such an exceptional incident as to justify the right to appeal.
Therefore, the Court deferred the request for the right to appeal and by doing so had, in effect, confirmed the ruling of the Magistrates and District Courts.
[The proceeding in the Magistrates: Civil suit (Magistrates Court of Tel Aviv) 44474/04, verdict of September 19, 2011. Judge Michael Tamir].
[The proceeding in the District Court: Civil appeal (District Court of Tel Aviv) 24026-10-11, verdict of September 6, 2012, panel of Judges Shohat, Inbar and Weinbaum-Woletzki].
[The proceeding in the Supreme Court: Request for Civil Appeal 6628/12, verdict of September 12, 2012, Judge Neil Handel, party representative for the forwarder and Customs agent- Attorneys Schtenger and Lalush].
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