Seller of Goods Lims Lorries Ltd

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LAW
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LAW
Introduction
A seller of goods here being Lim's Lorries Ltd is bound to the contract and is required to
perform certain requirements such as making out of invoice of the goods sold. The seller is also
supposed to ship the goods at the exact port of shipment and the goods shipped should be as
described in the contract.1 The seller is also responsible in procuring a Contract-of-Carriage
showing how the goods will be delivered to the agreed destination as shown in the contract. It is
also the responsibility of the seller to make insurance arrangements documents of the goods
being shipped on behalf of the buyer. The seller is also required to dispatch relevant documents
to the buyer such as the invoice, the insurance policy and the bill-of-lading for which in their
arrival will he claim payment.2 (Kwei Tek Chao (t/a Zung Fu Co) v British Traders & Shippers
Ltd. [1954] 1 AER 779). 3 The transfer of property and risk is seen in the Bill-of-lading whereby
the Bill-of-Lading is transferred to the Buyer to give issue the Property Rights in the goods as
well as all Rights in the Carriage Contract during the whole time of shipment and the goods will
be at the Buyer’s Risk (Hansson v Hamel & Horlev Ltd. [1922] 2 AC 36).4
1 Kwei Tek Chao (t/a Zung Fu Co) v British Traders & Shippers Ltd. [1954] 1 AER 779
2 The Thrunscoe [1897] p 301
3 Kwei Tek Chao (t/a Zung Fu Co) v British Traders & Shippers Ltd. [1954] 1 AER 779
4 Hansson v Hamel & Horlev Ltd. [1922] 2 AC 36

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In this case, Lim's lorries Ltd as the seller can hold the Carrier liable for the loss of the
250 lorries that were jettisoned during shipment and claim to be compensated because under s.4
CGSA 1992, it is clear the Carrier had a B/L and this is evident. The B/L that the carrier was
issued had specific information regarding the quantity of the goods that were being shipped and
that was 2000 lorries. This is evidence enough to show that the carrier was in receipt of the
2000 lorries as seen in the Bill of Lading (The Miramichi [1915] p 71). 5 The Bill of lading
holder is not subject to liabilities under the contract of carriage and therefore the seller Lim's
Lorries Ltd is not liable for the goods lost and hence can put forth a claim for compensation from
the Carrier. The Carrier lost the goods during shipment and that is the Carrier fault and thus
should be held liable. (Biddel Bros v E Clements Horst & Co [1911] 1 KB 934).6 The carrier
responsibilities under the Bill of lading governed by the Hague Visby Rules is that they should
ensure the ship and cargo space are sea worthy. In this case the Carrier ship had problems with
the engine and the space for the cargo was not enough hence made them to carry the 250 lorries
on the deck leading to their loss. The Carrier is held liable due to this fact and therefore
responsible for compensation and the seller can claim the lost 250 lorries from the Carrier (Law
& Bonar v British American Tobacco Co Ltd. [1916] 2 KB 605). 7 The Carrier is liable during
shipment to ensure that the cargo space is fit and safe for the receiving, carrying and preserving
of the goods to their destination. However, if that is not the case, the Carrier is then held liable
for any loss or damage resulting to the unseaworthiness. Because of this fact under the HVR
5 The Miramichi [1915] p 71
6 Biddel Bros v E Clements Horst & Co [1911] 1 KB 934
7 Law & Bonar v British American Tobacco Co Ltd. [1916] 2 KB 605

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which governs this contract, the seller can claim for the loss of the 250 lorries and hold the
Carrier liable. It is also the responsibility of the Carrier to care for the cargo as stated under the
HVR Art III 2, whereby the Carrier should ensure the cargo is carefully loaded, handled and
cared for throughout shipment. This was not the case as the Carrier jettisoned the 250 lorries that
were on the deck without previous indication that goods will be carried on deck. This fact gives
the seller the right to claim back the loss of those goods; 250 lorries from the Carrier.
Facts of this particular case whereby the Lim’s Lorries Limited in the United Kingdom is
a company that sells trucks to the Middle East. In this particular occasion the lorry company
made an agreement and was to send 2000 lorries to Jeddah in Saudi Arabia. They made
arrangements with XYZ Sea Carriers Limited for the lorries to be shipped to Jeddah. The two
parties entered into a carriage contract whereby XYZ would act as the carriage by sea. The Bill
of lading was issued to Lim’s Lorries Limited as was the contract requirement and the contract
was governed by the English Law. On transit via sea a few days later during shipment of the
2000 lorries to Jeddah, the Sea Carrier Limited “The King” passed a radio transmission on
August 1 2017 stating the engine problems it has been experiencing throughout the journey. On
2nd August 2017, another radio transmission was received from “The King” informing that it was
struck by lightning in the Red sea. This made 250 lorries out of the 2000 lorries which had been
secured on deck to be jettisoned so as to save the ship and the bulk of the cargo it was carrying.
However, there was no previous indication by the XYZ Sea Carriers Limited that there would be