A failure to arrange a veterinary inspection

A container of deep frozen salmon was discharged from a ship at a port in Scandinavia. ITIC’s ship agent member acted as agents for the carriers. All foodstuffs entering the EU from outside the EU must undergo an official veterinary inspection at the first point of import into the EU. The consignees, asked the agent to arrange for the veterinary inspection and thereafter for the container of salmon to be transported to their premises. As the carrier’s responsibility under the bill of lading ceased at the port, the agent was acting as a freight forwarder in arranging the haulage/veterinary inspection.

One of the member’s employees notified the consignee by e-mail of the arrival of the goods, informed them that a date had been arranged for the veterinary inspection, and asked for their confirmation. The employee went on holiday. The consignee failed to reply to the e-mail concerning the veterinary inspection and subsequently telephoned the member asking for immediate delivery. The individual at the member’s office who had taken over the matter simply arranged for trucking without the veterinary inspection.

Part of the cargo was delivered to one of the consignee’s customers before it was realised that the salmon had not been inspected by the veterinary authorities. The National Veterinary & Food Administration ordered the salmon to be destroyed, and the member received a claim from lawyers acting for the consignee for US$200,000 approximately, for the loss of the cargo, destruction costs, legal costs etc. ITIC appointed a lawyer, who advised that the member had defences, and who insisted that the consignee appeal the destruction order on the grounds that it was a waste of valuable resources to destroy the salmon, which was still frozen and still in good condition.

The appeal did not succeed, and the matter eventually went to court. The member’s main defence was that they were entitled to rely on the limitation amount in the terms and conditions of the member’s national trade association of SDRs 25,000 (US$40,000 approximately). The Club’s lawyers also alleged that the consignee was guilty of contributory negligence in that it failed to check that the veterinary certificate was included in the papers.

The court found in favour of the consignee, but for an amount of US$95,000 plus interest and costs (50% of the amount claimed). Although an attempt had been made by the member to incorporate the terms and conditions of the national trade association into their contract with the consignee, the court found that they had not done so sufficiently clearly. The court instead applied the general terms and conditions of the national Freight Forwarders Association, which provided for a limit of liability of US$141,000. However, the court also found that the consignee had contributed to the loss as they failed to check that the veterinary certificate had been provided, and therefore reduced the settlement to US$95,000.

ITIC also incurred costs of US$29,729.