letter of indemnity charterers, owners and insurance
Post on 10-Jan-2016
141 Views
Preview:
DESCRIPTION
TRANSCRIPT
01/200801/2008
01
/20
05
01/200801/2008
01
/20
05
Letter Of IndemnityLetter Of IndemnityCharterers, Owners and InsuranceCharterers, Owners and Insurance
01/200801/2008
01
/20
05
OWNERS: Standard London, Status and Rules, clause 20.21.4(v.e):
There is no recovery arising out of a bill of lading, waybill or other document containing or evidencing the contract of carriage issued with the knowledge of the Member or his Master with an incorrect description of the cargo or its quantity or its condition
CHARTERERS: LSW 1122 03/03, clause 3B4:
This Policy excludes any claim In connection with the issue of a bill of lading or similar document of title which the Assured or his agent knew did not correctly state the quantity and/or condition of the cargo at the time of shipment
01/200801/2008
01
/20
05
L/C – What is it and why this is good for the seller?L/C – What is it and why this is good for the seller? Documents required by bankers under L/C Documents required by bankers under L/C
Why do they ask for clean bill of lading?Why do they ask for clean bill of lading?
IncotermsIncoterms
Risk transfer and duty to insureRisk transfer and duty to insure
Role and nature of bill of ladingRole and nature of bill of lading What is LOI in the end?What is LOI in the end?
CASE STUDYCASE STUDY
Origins of LOIOrigins of LOI
01/200801/2008
01
/20
05It is simply a letter/confirmation by a bank acting on behalf of the buyer that credit will
be allowed by it for the purchase of the goods from an identified seller
He will get paid irrespective on whatever happens
What is L/C?What is L/C?
Why L/C is good for a seller?Why L/C is good for a seller?
01/200801/2008
01
/20
05
The seller must provide the documents stipulated by the buyer, which normally include:
-A commercial invoices
-A certificate of origin
-Insurance policy or certificate covering marine and war risks (in CIF contract)
-Full set of cleanclean marine bills of lading, marked “freight paid”
Disperances in documents may cause delays in obtaining payment or prevent making payment to the seller
Which documents are requested in L/C?Which documents are requested in L/C?
01/200801/2008
01
/20
05
SELLER: Charters a ship and pays freight
RISK TRANFER: When goods are crossing ship’s rail in the port of loadingin the port of loading
INSURANCE: Seller insures goods for his account in favour of the buyerin favour of the buyer
CIF (Cost, Insurance and Freight)CIF (Cost, Insurance and Freight)
CFR (Cost and Freight)CFR (Cost and Freight)SELLER: Charters a ship and pays freight
RISK TRANFER: When goods are crossing ship’s rail in the port of loadingin the port of loading
INSURANCE: Buyer insures goods for his own account and in his own favourin his own favour
01/200801/2008
01
/20
05
HAGUE VISBY RULES Article 4:
Bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described
Bill of LadingBill of Lading
What is LOI (Letter of Indemnity)?What is LOI (Letter of Indemnity)?
FRAUDFRAUDPromise to release shipowner from any liability regarding to cargo carried?
01/200801/2008
01
/20
05
Buyer:Buyer: ООО ООО ““СбытстройтехмехСбытстройтехмех””
Cargo insurer:Cargo insurer: САО САО ““Честь и СовестьЧесть и Совесть””
Seller (Trader):Seller (Trader): ОООООО ““Рога и КопытаРога и Копыта””
Shipowner:Shipowner: ОАООАО ““Эх, ПрокачуЭх, Прокачу””
P&I club:P&I club: Клуб Веселых и НаходчивыхКлуб Веселых и Находчивых
01/200801/2008
01
/20
05
BUYER: Launches cargo insurance claim
Marks bill of lading accordingly
Holds shipowner liable for loss and damage
When goods arive to the place of When goods arive to the place of discharge...discharge...
TRADER/SELLER: Has been cashed in for sold goods under L/C
SHIPOWNER: Calls trader and rests assured that cargo is insured and he is protected under LOI
01/200801/2008
01
/20
05
BUYER: Gets his claim paid by cargo insurance underwriters
Stays happy and relaxed
What’s next...What’s next...
SHIPOWNER: Founds his vessel arrested for cargo claim placed by recovery agency
Calls P&I Club for help
CARGO INSURERS: Pay cargo claim and appoint recovery agency under subrogation form signed by the buyer
P&I CLUB: Shows up and interviews crew
Finds out LOI was issued and feels sorry for the shipowner
01/200801/2008
01
/20
05
Not to accept LOI and make remarks in bills of ladingNot to accept LOI and make remarks in bills of lading Think twice Think twice
To understand risks he is taking by accepting LOITo understand risks he is taking by accepting LOI To be sure who is chartering their ship and provides LOITo be sure who is chartering their ship and provides LOI
To demand using P&I Clubs suggested forms onlyTo demand using P&I Clubs suggested forms only To demand signature of the bank under LOITo demand signature of the bank under LOI
In all circumstances ask for advice from their P&I Club or Charterers’ Liability In all circumstances ask for advice from their P&I Club or Charterers’ Liability insurerinsurer
What should shipowner / charterer to What should shipowner / charterer to considerconsider
01/200801/2008
01
/20
05
Thank youThank you
top related