Maritime Law Case Study: Analysis of Coffee Bean Shipment Contract

This case study examines a maritime law dispute involving Krittanai Thai Limited (KIT) and Down Under Pty Ltd (DU) concerning a shipment of Australian coffee beans. DU contracted with T.M Taunton (TMT) for the shipment, who in turn had agreements with Para Sumantra (PS) and Sea Shipping Li...Read More

Running head- MARITIME LAW
Maritime Law
Name of the Student
Name of the University
Author Note
1.

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Fact
 On 15th January 2020, Krittanai Thai Limited (KIT) enters into a sale contract with
the Down Under Pty Ltd (DU) to buy 385 tons of Australian ground coffee.
 On 20th January 2020 DU enters into a voyage charter with the TM Taunton (TMT) of
New Zealand for the ship South sea in order to carry the consignment from Australia
to Thailand.
 TMT was not the owner, but they had a two-year time charter party with the Para
Sumantra (PS). And they had a ten year Charter party with the Sea Shipping Limited
(SSS)
 On 24th January 2020, Du executes the delivery to the depot of the Sean Son Pty Ltd
(SSPL) of UK who was an agent of the SSS.
 Treasure Stevedoring Pty Ltd (TS) was employed by the SSS and SSPl in order to
pack the 385 tons the ground Coffee beans.
 The containers confined 275 hessian bags, with each bag containing 70 kilos of the
coffee beans. Altogether there were 20 containers, but all were stuffy.
 At the time of landing, KIT handed the bill of landing that was endorsed by DU.
However, it was found out that the bags in the 16 containers were damaged due to
condensation and the remaining four containers were broken.
 KIT and SSS jointly owned the Surveyors. It was improbable as the kraft paper were
not sufficient to prevent the damage. As to the damage to the remaining four
containers, it was seen that heavily rusted twist logs were used.
 Following it, the damage occurs due to the motion of the ship.

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Issues
The primary issues arising in the following case include the following:-
1. Will KIT be eligible to sue SSS for taking all the necessary steps for packing and
loading the cargoes in Australia?
2. Will SS be liable for the damages to the consignments.
Rules
The legislation that is applicable in the following case is as follows:
 Carriage of Goods Act by Sea Regulation 1998
 The United Nations Convention on Contracts for the International Sale of Goods
Under the Carriage of Goods Act, it governs the sale, and the trade of the goods that are
delivered through the process of shipping and the CISG governs the contract between the
international sellers and their business that is governed by the shipping.
Under article 3 of the Carriage of Goods Act states that the carrier of the ship shall be
obligated to maintain the due diligence of the carrier where the items shipped are ship
worthy, properly equipped for the supply procedure and it is holding some kind of
refrigerated items or some goods that requires preservation. About the Article 4 of the
Act, the carrier that is carrying the ship shall be properly equipped, and the discharge of
the goods and the package of the goods shall be done carefully that does not affect ts the
shipment procedure of the ship (Sefara 2014). Their duty also involves into handling the
necessary documents and charge for the shipment to the buyer that states specifically the
number of goods, all the specifications that were used for packaging purposes, the correct
amount of the quantity of the goods and leading mark or any kind of identification
necessary for furnishing the goods. It shall also include the number of packages, pieces

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and the conditions of the goods that are handed to the buyer. Such carriage documents are
considered as important evidence of the receipt of the carrier of the goods. Although
many pieces of evidence, contrary to the documents, shall not be made admissible in the
courts. The shipper must guarantee the carrier about the accuracy of the goods and the
number of packed goods. “Upon serving a notice stating the loss or damage such of the
goods in a written form to the carrier he shall not be made liable, therefore under the
contract of carriage, in case of any loss or damage be not specious, within three days,
such elimination shall be considered as the evidence of the delivery (Allison 2014)”.
Chapter 8 of the CISG states the damages that be claimed in cases where there is a breach
of contract between the parties commencing the trade. Section 8 states the right of the
buyer to seek the damages as per mentioned under the Articles 77-74. any party that is
claiming for the damages may be eligible where it was the duty of the seller in order to
furnish the particular items delivered correctly. Further, this act shall not be applicable if
under any state laws contract are established between the parties (Murgia 2015). Under
the Article 45(2) it states that below the CISG, a buyer’s right to damages is collective
with the other remedies—i.e., the buyer does not lose its right to entitle the damages by
raising any other remedy. Although the UNCITRAL does not quote any cases that have
smeared Article 45(2), it does note that, where a purchaser has taken the assistance of any
other remedies, the volume of the damages the purchaser may recuperate hinge on which
another cure has been resorted to by the consumer (Lookofsky 2016).
Under article 10 of the Carriage of Goods Act, this includes the sea carriage documents
that are essential for the carriage of the goods in cases where the delivery of the goods are
between different ports other than Australia (Ivaldi 2017).

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Case of Hunt v. Australasian United Nations Steam Navigation Company, it was in
regards to the maritime torts and the negligence and the breach of duty for which the
cargo and the shipment received was damaged for the malfunctioning. In this case, the
court granted the damage as it was the responsibility of the part of the shipping company
in order to deliver the goods as per the requirement and was sued as it was the lack of
negligence in the part of the shipping company in order to store the delivered goods.
Under Article 9 of the Carriage of Goods Act, it is stated that the rules as per the act shall
not affect any conventions as will be considered in all the ways (Berlingieri 2014).
Application
1. By the application of the rules mentioned above, it is stated that KIT will be
eligible to sue SSS in the federal courts of Australia and take all the necessary steps
against SSS for the loading and the packing of the Cargoes. Under the provisions
mentioned above, he had the duty to deliver the goods as per the requirement. Though
he was not the direct seller of the goods, but he had the responsibility as a carrier in
order to deliver the goods will all due care and diligence (Cooke et al. 2014). It was
negligence on the part of SSS as they owned the responsibility to ship the goods and
were the carrier. Though the fact that they have appointed a different party for
packing the goods but yet it was their responsibility to ensure that the goods that are
delivered are packed properly so that it does not get affected in the due procedure of
the delivery of the consignment. They own a duty of care in order to deliver the actual
amount as per the requirements of the consignment. Following the facts of the case,
DU already delivered the consignment with all due diligence and care and appointed
them for further delivery. When the consignment was delivered, it contained all the
items as was bought by the buyer. So it was the responsibility of SSS in order to

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ensure the packing of the goods in such a way that the goods that are delivered to the
parties are accurate as per their requirement of the order (Zhao 2020). The bill that
serves as evidence was given by DU that stated that there is no damage and the items
are proper. However, whom SSS was responsible for the delivery it was the fault in
their part of the SSS for the inadequate delivery and insufficient standard of care that
was required for the packing. TS was an agent of SSS who was responsible for the
package of the materials, so it was their duty to ensure that the items packed were
accurate and as per the standards that shall keep the consignment free from any kinds
of damages. Further, the bill that serves in the evidence was accurate, but by the
surveyor, it was seen that the container was opened and seen that
Containers were damaged due to the water while the remaining four containers
contained broken and deformed coffee beans. So under Article 3 of the Act, it is the
responsibility and the obligation on the part of the carrier to maintain the due
diligence for the shipment. However, from the facts, it is evident that they were
negligent in fulfilling their duties as they were responsible for the carriage of the
goods and the delivery of the proper goods (Eftestøl-Wilhelmsson 2015). Hence, it is
stated that under the Federal Courts of Australia, KIT shall be eligible to institute a
suit against them for the delivery of the damaged goods.
2. Following the facts of the case, it can be stated that SSS shall be liable for the
damages that have been occurred to the consignment. As per the Art 3 of the act, it is
the obligation upon the carrier of the consignment in order to deliver the goods as per
stated with due diligence and care. However, in this case, it is seen that the packaging
was poor, and the goods were damaged during the journey. It was the duty of SSS to
ensure that the packaging was made in good quality or such quality that shall sustain
any kind of difficulties that might occur in the course of the journey. It is evident from

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the surveyor’s report that maximum goods were damaged due to water and the poor
packaging. The packaging was seen with just one layer of the kraft paper that was not
enough to sustain the difficulties it might face during the journey. Moreover, the other
four containers were packed using heavily rusted twist locks. As a result for which it
could not make it top the deck properly. The procedure for securing the consignment
was not proper and with the due diligence. As the loss was suffered due to the poor
packaging and the method that was used for securing that resulted in breaking the
coffee beans and damaging the products more. It was their duty and responsibility to
ensure that the materials used are proper as TS was their agent. As SSS was the
carrier, who was responsible for delivering the goods the onus is upon SSS to prove
that they are guilty. However, it is evident that the damage occurred were for the
negligence and lack of due diligence and cares from the side of SSS as they not only
failed to ensure the proper packaging, their way of securing the items at the deck
harmed and damaged the consignment even more. So for that, the liability is upon the
carrier in order to ensure that the items that are packaged and are delivered are upto
the standers as per requirement. Under the case of Hunt v. Australasian United
Nations Steam Navigation Company, it was held that the carrier of the ship was liable
for the damages that have been caused to the plaintiff. Similarly, by its application in
the case the liability falls upon the carrier. In this case, it was evident that the due
stands were not maintained for which the damage occurred. When the seller enters the
contract with SSS, it was their sole responsibility to deliver the conditions as per
stated. It was a breach of the conditions of their contract too (Akhmetshin and
Kovalenko 2018). The liability of SSS was because it did not ensure that the goods
that are delivered accurately and due to the rolling motion that was regulated by the
SSS. So the sole responsibility falls upon the SSS to deliver the goods as per stated in

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the bill. Moreover, it was a breach on their part as they neither ensured the proper
packaging not ensures the rolling motions that might cause damage to the goods that
have been delivered. Hence under the section 8 of the CISG, any contract between the
parties that are outside the same background shall be made liable for the damages
occurred to the consignment or any breach of the contract that has been suffered.
Hence following the laws and the legislation it can be stated that SSS shall be held
liable for the damages as the goods were damaged under his due diligence and it was
his responsibility in order to ensure the due standards of care while packaging and
delivering the goods. Moreover, the goods suffered such damages for the motion roll
that was to be ensured by SSS. Their lack of responsibility towards the due care of the
goods and the improper storage for the goods was the sole reason for the damage.
Moreover, for that, they shall be liable as they were the carrier and it was their duty to
ensure that the delivery and the storage of the goods are done in a way that will not
affect the consignment.
Conclusion
In conclusion, it is stated that the judgement shall be made before the Federal Court of
Australia as the court deems fit observing the facts and the legislations laid for the same. It
can be stated that under Article 3, 9 and 10 of the Carriage of Goods Act, and Chapter 8 of
the CISG, SSS shall be held liable for the damages. SSS shall be liable upon the grounds of
breach of duty and negligence as it was his duty to ensure that the goods are delivered with
due care, but the consignment was fully damaged while the goods were under SSS’s
surveillance.

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Reference
Akhmetshin, E. and Kovalenko, K., 2018. Essential terms of the contract of carriage of
goods. In MATEC Web of Conferences (Vol. 239, p. 03006). EDP Sciences.
Allison, S., 2014. Choice of law and forum clauses in shipping documents-revising section 11
of the carriage of goods by sea act 1991 (cth). Monash UL Rev., 40, p.639.
Berlingieri, F., 2014. International Maritime Conventions (Volume 2): Navigation, Securities,
Limitation of Liability and Jurisdiction. CRC Press.
Cooke, J., Young, T., Ashcroft, M., Taylor, A., Kimball, J., Martowski, D., Lambert, L. and
Sturley, M., 2014. Voyage charters. CRC Press.
Eftestøl-Wilhelmsson, E., 2015. European Sustainable Carriage of Goods: The Role of
Contract Law. Routledge.
Hunt v Australasian United Steam Navigation Company Ltd [1919] FJSC 1; [1919] 2 FLR 72
Ivaldi, P., 2017. Carriage of goods by sea. In Encyclopedia of Private International Law (pp.
262-269). Edward Elgar Publishing Limited.
Lookofsky, J., 2016. The 1980 United Nations Convention on contracts for the International
sale of Goods. In International Encyclopaedia of Laws (pp. 1-250). Kluwer Law
International.
Murgia, P., 2015. Vicarious Liability in contracts of international carriage of goods by
sea (Master's thesis).
Sefara, A.A., 2014. Basis of Carrier's Liability in Carriage of Goods by Sea (Master's thesis).

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Zhao, L., 2020. Lex Maritima in a Changing World: Development and Prospect of Rules
Governing Carriage of Goods by Sea. In Maritime Law in Motion (pp. 761-783). Springer,
Cham.