Liabilities under liner bills of lading.

From our observations and cargo claims handled, it was clear to us that shipowners using liner bills of lading and calling at Alexandria port, face some cargo claims mainly due to bad rough handling during discharging operations carried out by independent sub contracted stevedoring companies.
As per liner terms, the shipowners, from the legal point of view, are liable to pay for such damages and are being asked to indemnity the cargo owners.
Upon payment of such claims, the shipowners request reimbursement from the liable party; the stevedore, some stevedores temporize in payment or even refuse to pay, leaving the shipowner with no other  choice but to proceed with legal action against stevedores.
In this point it is very important that a shipowner has a form of contract or agreement with the stevedoring company proving all contractual liabilities between said both parties to enable shipowners to prove inform of the local court that the stevedore has breached such contractual liability and can them be obliged by the court  to reimburse the shipowner.   
 

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Shipments of wheat in bulk

Shipments of wheat in bulk discharged in Egyptian ports are mainly received by the General Warehousing and Silos company. The weighing measures used by this company are not always precise giving shortages in weight. To avoid possible claims, members are advised to carry out a joint draft survey at loading port and sealing of hatches after loading and again a joint final draft survey, unsealing of hatches at port of discharge. This would help in repudiating member's liability for possible alleged shortages. Shortage claims may also be avoided by reviewing the weighing results of the loaded trucks on another official scales which are available in addition to the rather inaccurate custom weighing measurements. Members are advised to take measures in cleaning holds before loading. In addition, tightness of hatches must be checked to avoid possible sea water or humidity leakage to holds. Masters must report immediately if they observe remarkable waste during discharging by grabs or any unsuitable handling equipment.

Members should be aware of the fact that Alexandria Appeal Court has ruled to exempt carriers from loss in transit which applies to the goods which dries up by time such as seeds and the like (known as natural loss). The exemption applied is 1% and the ship owner will be liable to pay damages in respect of reminder of the loss.
The Alexandria Chamber of Shipping has also confirmed that all wheat consignments as a result of dryness by passage of time consumed in transportation from overseas port of shipment up to unload at the Egyptian ports is to be exempted from a 1% of the quantities of such consignments.

A great deal of cargoes when discharged at Alexandria port are surveyed by the Cargo Survey and Control Office. These surveys are usually not considered by the Egyptian Courts due to the fact that this office is a subsidiary of the General Supervisory Insurance Authority and therefore is not considered to be a neutral body to ascertain the damages/shortages sustained by cargoes.
On the other hand, if the claim is related to damages only (not shortages) there will be no documents available from the custom authorities which is considered to be vital in providing evidence of cargo shortages due to the fact that the custom document's main role is to ascertain the exact quantity of cargo received by the consignee to calculate the exact custom dues to be paid by the consignee. Therefore, damages cannot be proved or clarified from any custom authorities documents. At this point the Cargo and Survey Control Office plays its role by ascertaining the damages sustained by the cargo. But as we have previously stated, the Egyptian court will not consider it unless a police verbal process issued by the port authority police which states the damages occurred, then the court will consider the Cargo Survey and Control Office report on the basis that the port authority police is a neutral party to the conflict. Therefore it is advisory to members that in case of damage claims submitted against them which include only Cargo Survey and Control Office without any other backing from a police verbal process proving alleged damages, to check with the correspondent and to continue with legal action in court where there will be a fairly good chance of repudiating liability. For members guidance, Custom Authorities' documents shows only "shortages" in cargo in either number or weight but does not describe the "damages" for the reasons stated earlier.

Bagged Cargoes
In relation to numbers of bagged or unitized cargoes, upon discharging at Alexandria port of such type of cargo it is advised that tallying process should be affected on board the vessel rather than on trucks in order to avoid damages to cargo while handling from vessel to trucks caused by dropping or tearing of bags.
 

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Shipments of newsprint reels 

Discharge operations of such cargoes are sometimes done by slings due to the lack of specialized handling equipment. Slings cause damages to the reels in the form of cuts at the reels edges leading to rather huge claims. Most of these consignments are sometimes insured under a door-to-door policy. Surveying of such consignments are sometimes done in the consignee's warehouse far away from the port of discharge . Members are advised to carry out joint survey report during discharge in order to ascertain the exact damages if any. Moisture, humidity is another problem which can be used against members for submission of claim . Moisture is usually found at the outer cover of the reels only without any effect on the contents of the reels. Alleged wetness is claimed usually by receivers and accordingly it is recommended that members take necessary steps to assure dryness of holds and avoid condensation on paper reels during voyage, also to appoint a surveyor to ascertain the soundness of cargo.

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Edible Oil cargo to Egyptian ports

Members are recommended to avoid as much as possible loading cargo for different consignees in the same tank.
- Master to keep ullage and correction calibrations tables confirmed and duly stamped from ship's class.
In such cases where many receivers of the same cargo share same tanks / holds it is preferably that surveyor attend vessel upon arrival and do necessary measures to avoid shortage of cargo with one consignee, and possible excess with the other. Shortage of cargo will obviously lead to claims from both consignee & custom authorities while the excess cargo will lead to imposing custom fines and dues.
 

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Sugar, fodder shipments to Egypt 

Consignments of sugar and fodder stuffed in bags are usually vulnerable to shortages due to the use of hooks in discharging operations. Receivers carry out their unilateral surveys to ascertain unjustified shortages leading to huge claims from insurers. Members are recommended to apply for joint survey to fairly establish the shortages, if any.
Humidity or slight leak of vapor and sea water has big impact on this commodity. In one case we traced water condensation in hold and found it was attributed to relatively high loading rates directly from the production line at the refinery and closing the hatches while sugar still hot. Later during the voyage with outside colder temperature resulted in condensation of vapor in hold.

According to Alexandria port authority's regulations, approvals to discharge sugar consignments are only granted on Wednesday of every week. Members should be aware of this fact in order to avoid any delay to vessel. Bulk raw sugar discharged at Alexandria port is generally hand-bagged on board the vessel, then loaded on trucks by vessel's cranes. Hand bagging is executed by stevedore labours causing various kinds of contamination due to long working hours.
 

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Custom fines and dues

Custom fines and dues are imposed by the Custom Authorities regarding shortages or over discharged cargoes. The fines and dues are usually very high. Members are recommended to inform local correspondents upon receiving the custom's first notice of claim. Correspondents may study the claim and can revise the custom tariffs upon which the fine and dues were imposed and can considerably lower and settle the claim amicably.
Members are not advised to go through legal action against the custom authority in front of Administrative Court as such court tends to  give its judgment after quite sometime in favour of the custom authorities thereby avoiding legal fees and effort.
 

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Agricultural products

Imported fresh fruits and vegetables are sometimes insufficiently packed (i.e. unsuitable ventilation. Members are advised to affect a cargo preloading survey to ascertain conditions of cargo before loading and obtain from shippers a release in written form from any liability arising from inherent defects of such agricultural products.

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Steel products from Alexandria

Due to usual inappropriate preparation at manufacturers premises and bad storage in the interval during loading operations, steel products tend to rust especially in humid climate or big difference in temperature between load port and discharge port. Steel already in a rusty condition faces on-voyage deterioration.. Members are advised to carry out a joint preloading survey to inspect the cargo condition in addition to weight   prior to loading and try to clause bills of lading accordingly to reserve their rights against any potential claims from receivers at port of discharge. Tallying of this cargo is strongly recommended at load and discharge ports. Analysis results is the most reliable document to reject this cargo based on specification. Slight rust does not mean non complying to standard cargo.
 

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Vehicles  

A great deal of car trade transportation is carried out from place of origin to place of import by car carriers via Egyptian ports. The main source is Japan. Cars, half trucks and trucks are delivered in Suez port where they are transported to Alexandria port either by land conveyance or driven by road. They are then reshipped in small lots in multi purpose vessels to European ports for export. It is here advised that members should be aware to the soundness of these vehicles as they are usually covered with wax and dust and sometimes dents, scratches and other outer / inner parts of the vehicles are missing due to rough handling or theft during inland transportation Therefore it is advised that such cars are   carefully inspected by a certified surveyor in order ascertain the soundness of cars or to insert any remarks observed on the bill of lading to protect members against any potential claims.
 

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Contact with fixed objects in Egyptian ports 

Owners should be aware and cautious regarding accidents, contacts with  fixed objects in vicinity of port (Fenders, buoys, berths, barges...). Contacts with fixed objects (even if slight contacts) may lead to very huge claims of repairing replacing damages - maybe previously damaged due to other contacts - or even vessels arrests, seizure ...etc.
Members are advised to immediately contact the local correspondent where the matter can be solved amicably.
 

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Allegations for facility damage Claims - APA /EDK

Alexandria and El-dekheila Port Authorities were lately enforcing allegations against calling vessels for being allegedly responsible for already existing damaged fixed objects within the vicinity of the two mentioned ports, either fenders, buoys, jetties, quays, piers, etc... Vessels are usually not permitted to sail, although it may not be in any way at fault, until payment of full claimed value. APA / EDK will deny all defenses submitted by masters even evidence which support any appointed surveyor's findings.
A Club letter of undertaking is not accepted by the authorities.
Masters need to be aware of these allegations and should always take necessary precautions by making a fast visual inspection for berths or fenders while maneuvering before berthing and with the aid of a camera or video recording giving indication of timing and date, can prove and ascertain already existing damages. This is to be submitted to the Port Authorities supported by a note of protest.
 

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Marine Pollution / Natural Protectorate's Regulations in Egypt 

The main governmental body dealing with problems related to Natural Protectorates in Egypt is the Egyptian Environmental Affairs Agency EEAA. This organization, in conjunction with the law no: 102 for the year 1983, defines a Natural Protectorate as an area of land or coastal waters that contains any type of natural life of a great cultural,, scientific or tourist value. This law prohibits any activities which may cause damage to these natural habitats and the natural life at these areas. Claims to natural protectorates mainly involve damages to Coral Reefs in the Red Sea area. The EEAA, in establishing the claim amount against the party liable for any damages, depend upon a fixed ”equation” which is as follows:
Area damaged x Density of Coral Reef in such area % x Damage % x Rate of growth of the damaged reef x US$ 120,- per square meter of reef. This equation will establish the claim value. The Egyptian Law number 4 for the year 1994 " Environmental Law ” deals with the regulations related to the pollution in general. This law also regulates the punishments to be applied against the liable party, which are as follows:
" Imprisonment of the liable person, payment of a fine not less than US$ 70000,- and not more than US$ 150000,- in addition to all expenses of removing and cleaning the polluted area."
Expenses of removing or cleaning will surely cause very huge claims.
Finally, a brief summary of some of the main incidents which occurred in Egypt and were a main reason for widening and stricture of the laws regulating Pollution and Natural Protectorates:
- MV "LA NAY" - A Dutch vessel caused pollution in September 1987 to Sharm El Sheikh coast in the Red Sea area. The EEAA in cooperation with the Suez Canal Authority,, Ministry of Maritime Transport and the Petroleum companies in the area removed and
- cleaned 500 tons of fuel oil leaked from the mentioned vessel. Legal action was carried out against the vessel.
The case was finalized in a rather unusual way; the Egyptian government gave up litigation when the Dutch government relinquished the 1987 / 1988 Egyptian debts to Holland and payment of US$ 750000,- being removing and cleaning costs.
- MV "" SAPHIR" - A Panamanian vessel grounded and caused severe damage to a large area of Coral Reefs in September 1989 in Ras Nousrany coast in the Red Sea area and also pollution due to leakage of its cargo of raw phosphate.
The vessel sunk while trials to refloat her. The case is still proceeding in Egyptian courts.
- MV " NAYOTA " - A Panamanian vessel caused pollution in October 1989 infront of Ras Nousrany coast. The claim paid was in the sum of US$ 1.5 Million.
- MV " LOBAR HORN " - A Liberian vessel caused pollution in December 1989 when grounded in front of Suez Canal entrance. Leakage of 2000 tons Petroleum oil damaged the natural marine Environment in the area.
The claim submitted was US$ 3 Million and was finalized amicably in the sum of $ 1.25 Million.
- MV " PANNY SAMBA COTIA " The vessel collided in December 1989 with a Petroleum rig causing 10000 drums present on board the rig to leak in sea water. The claim paid was $ 2.5 Million.
 

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