Cargo Claims

Where cargo is discharged on FIOS terms, ie direct delivery terms, the Carrier’s liability should cease at the ship’s tackle. However, the Egyptian Supreme Court decided that even if there is direct delivery that the Carrier will be liable until effective delivery- ie on the cargo leaving the customs premises.

A number of attempts have been made to persuade the court to accept that the Carrier should not be liable once the cargo is out of his control, but so far these have been unsuccessful. For example, if a bagged cargo has been placed on trucks and some of these fall off before the trucks reach the weight-bridge, at that stage the number of bags will not have been counted and the Customs Release Order (CRO) will not have been given. The CRO is the tally of the cargo and represents the weight when the trucks cross the weight bridge. Any application to the Courts will be decided on the basis of the CRO, and therefore the carrier would be held liable for the loss of the bags – even though this occurred after discharge.

In Egypt it is possible to appoint Court Experts. For example if a vessel arrived at an Egyptian port with damaged cargo, the parties would appoint their surveyors.

The Egyptian courts would only regard the parties’ survey reports as guidelines and not as binding. If the surveyors did not agree on the cause and extent of the damage a Court Expert could be appointed who would consider their reports the parties can argue that they don’t agree with it and the Court is NOT bound to follow the Expert’s findings, although the Egyptian Maritime Chambers would usually follow the findings of the Court Expert.

For urgent matters such as fires or collisions an application can be made to the court to appoint a Committee of academics such as university professors or registered private surveyors to investigate the matter before the evidence disappears.

Most of the Court Experts are auditors and not surveyors. In fact there are only a few marine surveyors to cover all the ports in Egypt.

It is possible for surveyors to take photographs in Egyptian port. While permission has to be requested this is normally only a formality. The port police control this system.

All foodstuffs or anything for human consumption or which is considered environment unfriendly has to be passed by the Sanitary Department, the Health Control Department or the Agriculture Department before it will be released. All foodstuffs and anything for human consumption is always tested before discharge. Sampling will be carried out swiftly. There are laboratories in each main port in Egypt. If the laboratory rejects the cargo the receiver has the right to appeal to the main laboratory in Cairo. If they reject the cargo, in accordance with the customs regulations the receiver either has to (1) re-export the cargo against a bank guarantee in the amount of 25% of the total value of the cargo in favor of the customs as security until he has imported cargo with the same description within three months from the date of the rejection when the bank guarantee will be cancelled or (2) the cargo to be destroyed in the presence of an appointed committee represented by the port police, customs officer, receivers, ship agents. A statement should be issued by all of these parties saying the amount of cargo which has been destroyed in the customs premises or an area outside the customs premises which is accepted by all the parties concerned.

If vessel is arrested for a cargo claim, attempts will be made to persuade claimants to accept a letter of undertaking but if they wanted to be difficult the claimants could insist on a bank guarantee. The standard wording of a letter of undertaking to release a vessel from arrest appears on the next page.