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Trade allowance

The situation preceding the Supreme Court decision of 14 December 2005

Cargoes in bulk are by nature subject of loss in weight during its carriage usually resulting from natural shrinkage, evaporation etc. This loss is increased for some cargoes by the inevitable dispersal of cargo during the load and discharge operations.

At Casablanca port for example and particularly for wheat, the cargo is either stored in silos in the port area, or given direct clearance from the port. In all cases the cargo is only weighed on its clearance from the port, while crossing the weighbridge. The result of this weighing is considered as the official delivery weight to the receivers and therefore determines possible short landed quantities.

These losses at the quay are often attributable to the tightness of the grabs during discharge, the overloading of the means of cargo receiving equipment i.e Lorries or trucks and defects in the weighbridge.

As Moroccan courts accept as delivered only the quantity determined by the port weighbridge scales, these losses at the quay, subsequent to discharge, are often subject of claims against the carrier, even though he is not responsible for this loss.

Despite of the application of Hamburg Rules in Morocco since 01/11/92 which is not recognizing the trade allowance often referred to "customary allowance" or "freinte de route" , the majority of the claims for shortages that do not exceed 2 % of the B/L quantity have been rejected on the basis of trade allowance .

Unfortunately, this exoneration of the sea carrier from any liability due to trade allowance became more contested. The cargo interests were arguing that the sea carrier should prove that these shortages are exclusively attributable to the nature of the cargo in order to invoke the trade allowance and consider that the level of this trade allowance should not exceed 0,5 % of the B/L quantity.

In 2002, the Moroccan Supreme Court followed this argumentation and cancelled a decision which exonerated the maritime carrier for trade allowance at the motive that the sea carrier exoneration is not automatic and that the carrier should prove that the shortages are exclusively due to the trade allowance i.e to the cargo nature and its condition of transport and not to a negligence of the carrier or his servants.

Due to this  unfavourable jurisprudence for the carriers , cargo interests have multiplied the arrest of vessels, either for the enforcement of judgements they have already obtained or on conservatory basis for "expected "and "future" shortage on cargoes during discharge.

 

 

Situation Since The 14.12.05 Supreme Court Decision

 

Fortunately on 14/12/2005 and after a judicial fight for more than 13 years, we and our lawyers obtained a favourable decisions issued by the Supreme Court exonerating the sea carrier from any liability for trade allowance by extending to the sea carriage of a law governing the road carriage (Article 461 of the Moroccan Code of Commerce, applicable to road transport) even if the the level of the trade allowance was not yet fixed uniformly.

More recently the Supreme Court rendered an important decision  confirming that the sea carrier is exonerated from any liability for trade allowance when the shortages are less than the tolerance admitted and that it is the consignee (cargo interests) who must prove the contrary i.e. that the shortages are due in fact to a sea carrier' fault or negligence.

In another recent case namely PONTONIKIS case the local court considers that the shortages consecutive to the trade allowance can not be considered as a maritime debt allowing the vessels’ arrest.

Since then, the number of ships’ arrests was progressively decreasing and many minor shortage claims were rejected. The battle is won but not the war as we have not yet a real and constant "jurisprudence" (quieta non movere) on trade allowance.

Meantime, we are willing:

1/ To continue to fight in the Courts for establishing a "jurisprudence constante" in matter of trade allowance.

2/ To continue discussions in progress with cargo underwriters for a conventional rate of 0,5 % waiting  a trade allowance  uniform rate to be fixed by the jurisprudence.

3/  To try obtaining an agreement from underwriters on guarantee form Defmar/P&I without providing a bank security to release the vessels from arrest or to avoid such arrests.
  
RECOMMENDATIONS
  
For defending or avoiding better any shortages claims, Defmar recommend their Clients (Clubs, owners, charterers , operators...) to carry out  :

  1. Joint draught surveys at load and discharge ports

 

  1. Joint sealing / unsealing of holds at departure and arrival
  1. Clausing correctly the B/L if the declared weight is not accurate

 

  1. Joint supervision at discharge and control of cargo weighing.

 

CONCLUSION

In conclusion the principle of the sea carrier' exoneration for trade allowance is now admitted by Moroccan courts notwithstanding the application of Hamburg Rules in Morocco.

Nevertheless we must continue our efforts in order to obtain a uniform level of this trade allowance.

Mohamed Laazizi

DEFMAR