Seller’s interest defense under FOB terms: peculiarities of river transportation and the Buyer’s obligations

The Client, one of leading foreign traders in the Danube region, concluded a commercial contract on agricultural products supply under FOB terms, port of Giurgiulesti.

According to the parties’ agreement, the Seller undertook to supply the goods in full and in proper quality on board the self-propelled vessel with barge convoy nominated by the Buyer, while the Buyer undertook to accept the goods and to pay 100% goods’ value not later than 48 hours upon receipt of the agreed set of documents in copies.

The Seller supplied the goods in full on board of the vessel and served to the Buyer copies of the documents together with the invoice. In addition, for import formalities at the destination port, the Seller, at the Buyer’s request, served to the master of the vessel against his receipt the originals of the certificate of origin and phytosanitary certificate.

The vessel proceeded from Giurgiulesti to the destination port on the Danube river. Meantime, the payment for the goods supplied was not made within the terms set forth in the contract.

The Seller faced an ambiguous situation, i.e. the vessel left the loading port and physical control over the goods was lost, while original bills of lading remained with the Seller and original certificates were served to the Buyer.

Having not received payment in this case, the Seller applied at Interlegal to defend its interests and to receive full payment for the goods. In such cases the main goal is to prevent cargo discharge at the destination port until buyers make full payment for the supplied goods.

In the process of active work upon the case, Interlegal lawyers performed the claim handling and served the respective claims both on the Buyer and the Shipowner. The claims were based on the applicable FOSFA standard terms and rules of cargo transportation under the ‘CONGEBILL’ bill of lading.

Interlegal prompt actions resulted in vessel stoppage at her approach to the destination port, with cargo discharge prevention for more than ten days, i.e. until the Seller has received the full payment for the supplied goods.

Interlegal expert Olena Ptashenchuk under general supervision of the associated partner Natalya Myroshnychenko led the case.

 

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