500 thousand USD for cargo deterioration

• International Trade
• Litigation & arbitration

Task

The Client, cargo owner who incurred losses amounting to ca. 500,000 USD due to cargo deterioration during sea carriage, applied to Interlegal.

In the framework of international carriage, barley was loaded on board of the vessel at the Yeisk Sea Port, while the destination place was Poti. Port State Control performed cargo inspection before the vessel departure, followed by vessel delay for 20 days in order to eliminate flaws. Due to the vessel regular breakdown, voyage from Yeisk to Poti also lasted over 20 days, thus the vessel aggregate delay made up 45 days.

Upon the vessel arrival, a significant cargo deception, damage and insect infestation was detected in Georgia. At the beginning of case study by the lawyers, situation was the following:
A) Vessel is arrested in Georgia.
B) Vessel is not covered by P&I.
C) Shipowner rejected the Charterer’s loss recovery and further cooperation, due to lack of funds.
D) It is impossible to discharge cargo due to quarantine.

Solution search

Interlegal lawyers studied all the case documents in due time and assured positive results of arbitration proceedings for the cargo owner.
Following three rounds of sharing documents and evidence, London Maritime Arbitrators Association (LMAA) recognized the cargo owner’s right on damage recovery. Arbitration award satisfied the Claimant’s claims in full and rejected the cargo owner’s counterclaim in the amount of ca. 250,000 USD.

Result

But it is not the same thing – to obtain arbitration award and to enforce it in Georgia. Interlegal Georgian office and 20-year experience in court and arbitration proceedings facilitated the decision to sell the vessel by auction, with earnings aimed at the Charterer’s loss reimbursement. Following the vessel sale, our Client obtained the expected result.

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