Agent joint in action for misdescription of origin

The carriers of a cargo of 21 x 40' containers of acetate tow, which was discharged at a U.S. port from Brazil, instructed their local agents to arrange for the goods to be reloaded into containers belonging to another shipping line and transported to Houston to connect with the other line's service to Hong Kong.  The local agents also received an instruction from the owners of the goods to arrange for new descriptive labels to be affixed to the pallets of acetate tow before the goods were reloaded.  The new labels were provided by the owners of the goods and were passed by the agent to the company employed by him to reload the goods into the line's containers.  The agent then arrange for the containers to be trucked to Houston where they were loaded on to a ship for carriage to Hong Kong.

More than a year later the agents received a summons naming them 19th out of 20 defendants in a suit brought by the buyers of the acetate tow in Hong Kong alleging that all parties had conspired either knowingly and wilfully or negligently to defraud the buyers.  the Club appointed lawyers to defend the agents and their enquiries revealed that the new labels provided by the original owners of the goods stated "Made in USA" whereas the acetate tow was actually of Brazilian origin.  The agents, who had arranged the re-labelling, were alleged to have conspired to defraud the buyers into paying the price for high quality acetate tow rather than the inferior product actually received.

The buyer's claim was for US$3m and the Club's lawyers vigorously rejected the allegation against the agents.  Eventually the parties agreed to settle and the agents made a modest contribution of US$ 5,000 towards the settlement.  Unfortunately, however,  as so often happens in such cases the price of success was high and the Club paid legal costs in excess of US$ 35,000.