International Trading Conventions

The Need for Regulations
The 2000 BIFA Conditions
The Hague-Visby Rules
CMR Conventions
Warsaw Convention

The 2000 BIFA Standard Trading Conditions

1. Application of the conditions

The conditions are intended only for the use of trading members of the British International Freight Association and they supersede the 1984 IFF Conditions upon which they are largely based. This does not mean that because a forwarder is a BIFA member the 2000 Conditions automatically apply. In order to do so they must be incorporated into the contract made with the customer and this is best achieved by specific agreement. It is also prudent for a reference to the conditions to appear at the foot of quotations, notepaper and invoices, and even better if the conditions can be reproduced in full on the back of this stationery. In that way there is a good prospect of proving incorporation by means of a previous course of dealing between the parties.

The conditions apply to all business undertaken by a BIFA member whether a charge is made or not. This avoids the problem for both forwarder and customer of trying to establish, after the event, whether the forwarder was acting as packer, warehouseman, carrier, customs agent, consolidator, or all of these in a particular transaction.

It should, however, be borne in mind that when a forwarder is concerned as a principal in international carriage (whether physically carrying the goods or not) a substantial part of its activities may fall within the rules governing international carriage considered in this section. It is particularly common for forwarders to become liable directly under the CMR Convention and also the Warsaw Convention. The 2000 Conditions recognise that in these instances the mandatory international law will apply in place of any contradictory provision in the conditions. However, in the first instance it will normally be claimed that the standard provisions on liability in the BIFA Conditions apply, i.e. compensation of two SDRs (approximately £1.90) per kilo and, in order to claim the generally more favourable compensation provided by international Conventions such as CMR and Warsaw, the customer will have to establish that the loss occurred during a period of carriage when that international Convention applied. In the case of multimodal movements and hidden damage, that may not always be easy.

2. Documentary requirements

There are a number of instances where the BIFA Conditions require that customers’ instructions or requirements be expressed in writing. This is a useful discipline as it makes it far more likely that those instructions will be properly received and passed down the line to any subcontractors of the forwarder. It should also ensure that clear evidence survives in the event of subsequent disputed over the carrying out of services. Written instructions and agreement are required if:

1. The customer wishes the forwarder to insure the goods.
2. The customer wishes the forwarder to be liable as a principal for the collection of cash on delivery or for the release of documents to another party.
3. The forwarder is to be liable for giving advice or information not related to a specific transaction.
4. The forwarder is to accept and be liable for transactions involving bullion, coin, precious stones, jewellery, valuables, antiques, pictures, human remains, livestock or plants.
5. The forwarder is to be made liable for a timed delivery.
6. The forwarder is to accept goods of a dangerous or damaging nature, goods likely to harbour or encourage vermin or other pests or goods liable to taint or affect other goods.
7. The customer wishes a declarations of value to be made to the carrier so that any loss or damage claims will not be limited by the usual financial limits on carrier liability, or if the customer wishes the forwarder itself to accept increased liability.

The conditions do not state that any particular documents will be issued by the forwarder upon receipt of the goods. The nature of the document issued will depend on the type of transaction and upon whether the forwarder acts as principle or agent. Documents issued could therefore range from a simple warehouse receipt to a forwarder’s certificate of receipt or certificate of transport, FIATA FBL (subject to the FIATA terms) forwarder’s house bill of lading or house air waybill or full carrier documentation such as a CMR consignment note.

3. Responsibilities of the exporter/importer

Besides the responsibility in certain cases mentioned above to give instructions in writing, the customer of the forwarder will be responsible for:

1. the accuracy and adequacy of the description of the goods provided by it;
2. the adequacy of packing, labelling and marking of the goods;
3. the suitability and condition of any container trailer or tanker into which the customer has loaded goods when such transport unit has not been provided by or on behalf of the forwarder;
4. any claims made against the forwarder as a result of carrying out specific instructions of the customer or arising from the customer’s negligence or breach of warranty;
5. any general average which may be paid;
6. any freight collect charges which the consignee fails to pay after proper demand;
7. making claims within set time-limits. The customer must make a claim in writing within 14 days of becoming aware of a problem. If this is not done, all recourse may be lost unless there were exceptional circumstances. It is also important to note that a formal legal claim must be made through the courts by issue of a writ or summons and giving notice thereof to the forwarder or its solicitor within nine months of the event giving rise to the claim. This time bar is very tight given the leisurely pace at which some insurance claims progress, and exporters, loss adjusters, insurers and solicitors need to pay careful attention to it.

4. Liabilities of the forwarder under BIFA Conditions

The nature of the forwarder’s liability depends on whether it has acted as principal or agent. The forwarder will only be deemed an agent where the customer has been put into a direct contractual relationship with a carrier or other provider of services. Where, for example, a forwarder obtains a bill of lading made out in the customer’s name, the forwarder will ber regarded as an agent, but if a house bill is issued to the customer while the forwarder obtains an ocean bill of lading in its own name from the shipping line, the forwarder will normally be regarded as a principal.

The difference between the agent role and that of principal is important. Where the forwarder has acted as an agent it will generally be liable only if it has been negligent in making the shipping arrangements. The customer would have to make a direct claim on the carrier in respect of any loss or damage to the goods while in the actual carrier’s charge. Where, however, the forwarder has acted as a principal it will be liable for loss or damage to goods between the time of taking them in charge and the time of delivery. The customer’s claim would therefore be against the forwarder who would be liable in accordance with the terms of the BIFA Conditions (unless a mandatory Convention applies) and the forwarder would be left to pursue recourse against any actual carrier,. Other than itself, which was involved in the movement.

The forwarder is relieved of liability for loss or damage only in the case of:

1. strike, lock-out, stoppage or restraint of labour, the consequences of which it is unable to avoid by the exercise of reasonable diligence;
2. any cause or event which it is unable to avoid and the consequences of which it is unable to prevent by the exercise of reasonable diligence.

The forwarder will thus not normally be liable for matters which were under the control of the sender or consignee, such as packing and any handling or stowage by those persons, or for any inherent vice of the goods.

5. Compensation under the BIFA Conditions

Compensation under the 2000 Conditions is now calculated on the basis of the value of the goods at the place where they were shipped and not on the arrival value of the goods. When liable, the forwarder will pay compensation of two SDRs (approximately £1.90) per kilo where goods are lost or damaged and a maximum of 75,000 SDRs (approximately £70,000) on a claim involving errors and omissions. Compensation may be payable for delay in delivery but may not exceed a maximum of twice the charges for the relevant transaction. Increased liability may be agreed by special arrangement and against additional charges.

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