In the last article, we explored the law that regulates a Freight Forwarder’s responsibilities (FF) according to different industries (air, sea, road, rail). This article will focus on whether FFs share the same obligation with the Shipper and the Carrier.

Lastly, we will also touch on whether a FF be subjected to a criminal or administrative offence (if there is any violation of laws).

Freight Forwarder = Carrier/ Shipper?

Based on the case Jones v General Express [1920] 4 LI.L. Rep 127, the Court held that:

‘A forwarding agent is not a carrier; he does not obtain the possession of the goods; he does not undertake the delivery of them at the other end. 

He only acts as an agent for the owner of the goods to make arrangements with the people who do carry.’

In short, FF is merely a facilitator and a middle person who will make arrangement with the Carrier and/or the Shipper with regards to transportation of hazardous cargo. However, the transaction process does not end at FF’s stage. Hence, the legal status of a FF is merely an agent.

Malaysian Context

Similar facts can also be seen in the Malaysian case of Etonic Garment Manufacturing Sdn Bhd v Kunn-G Freight Systems (M) Sdn Bhd (Malaysian Airline System Bhd, third party) [2011] 3 MLJ 98. 

In Etonic Garment’s case, the Defendant, a FF, was sued for failure to deliver goods within a reasonable period of time. The Court held that the Defendant, as a FF has complied with its contractual obligations by delivering the goods from the Plaintiff Shipper’s factory to MASkargo and arranging for the transport of Plaintiff Shipper’s goods through MAS (Carrier). As the Defendant, a FF, did not undertook to deliver the goods to Dublin itself nor ensure that MAS as Carrier did so, the Defendant was not responsible for failure to deliver the goods in a timely manner, nor were they responsible for any damage, loss or loss of profit suffered by the Plaintiff Shipper. 

Therefore, it is established that FF is not a carrier and its responsibilities are the moment they collect the goods from the Shipper/Manufacturer premises and later deliver the goods to the Carrier, to be delivered to Consignee.

Another case worth mentioning is Ing Hua Fu Marine Line Sdn Bhd v Vitachem (M) Sdn Bhd & Anor [2013] 9 MLJ 825.

In this case, the cargo contains agrochemical products which is known in the shipping industry as dangerous cargo. The cargo exploded on board the Vessel and the Vessel sank. Freight Forwarder was sued as the 2nd Defendant for failing to notify that the cargo was of dangerous nature. 

The Court held that under the tort of negligence, the FF is exempt from liability and all damages suffered by the Carrier is borne by the Shipper. However, since the FF provided an independent warranty to the Carrier that the goods were safe for shipment, it is liable for breach of warranty

Key takeaways

1. Generally, FF is not a Carrier nor a Shipper if its role is merely to make arrangements for the transport of shipments as per Etonic Garment’s case;
2. However, based on the Ing Hua Fu Marine’s case, FF may be liable under contract if it provides a warranty that the shipment is safe and not dangerous. Therefore, FF still should ascertain the nature of the goods upon arranging for transport.
3. In tort, legal liability is determined by whether the FF undertakes to deliver the goods themselves, or undertakes to ensure that the goods will arrive promptly by the Carrier.
4. FF is bound by its contractual obligations between parties and may be found liable for breach of contract.

*This article is only for informative purposes. If you have any specific freight forwarder or shipping relevant matters, consult a professional to understand better.

Rahayu Partnership provides a wide range of services that cover internationally and locally. Please do not hesitate to contact us for a consultation.

By Rahayu Partnership, Malaysia
Law Firm Website: www.rahayupartnership.com

The usage of logistics has significantly increased over the decades. Particularly during the pandemic when no one is allowed to go out. People have been shopping online, locally or even globally.

The demand for cross country goods exchange did not slow down at all. All these goods are carried by cargo in various ways: by air, sea, road and rail. Typically, the party that arranges and manages the entire process is the freight forwarders (FF).

In this article, we will discuss the FF’s liability for carrying hazardous goods by air, sea, road and rail.

What is ‘Hazardous Goods’?

The general meaning of it is referring to goods that are capable of causing physical damage in either a direct or an indirect manner (as per Scrutton on Charterparties and Bills of Lading [125th Ed])

As we discuss the global shipping norm, its definition varies from country to country. Moreover, it also has specific meanings across different ways of transport. Let’s explore more below.

Carried by air

The definition by air is set out in Civil Aviation Directives 18 – National Transport of Dangerous Goods Programme (CAD 18 – NTDGP), Issue 01/ Revision 00, which is:

‘Dangerous Goods’ means things that can risk health, safety, property or the environment. It is all specified in the list of dangerous goods in Technical Instructions.’

For the obligation of the operator (carrier) and shipper, Section 134 of the Civil Aviation Regulations 2016 can be referred to.

Malaysian Context

The list of Dangerous goods created by the International Civil Aviation Organisation (ICAO) in the ICAO Technical Instructions is applicable in Malaysia.

*Do note that local Air Carriers and Shipper should have ICAO Technical Instructions in hand to ensure that they comply with international requirements for transporting dangerous goods/hazardous material.

Carried by sea

Internationally, the transport of dangerous goods is regulated by:

1. Chapter VII of the International Convention for the Safety of Life at Sea 1974 (SOLAS)
2. International Maritime Dangerous Goods (IMDG) Code

Locally, it is regulated by:

1. Merchant Shipping Ordinance 1952, Carriage of Goods by Sea Act (COGSA)
2. Each Port’s by-laws

*By-laws refer to the law made by the local authority.

Malaysian Context

For instance, Pasir Gudang Port in Johor is regulated Johor Port Authority (Pasir Gudang Port) (Scale of Charges) By-Laws 2011 (PU(A) 175/2011). Therefore, people have to comply with international and local laws when dealing with freight forwarding matters.

So far, as Malaysia is a signatory to SOLAS, Chapter VII of SOLAS and IMDG Code are applicable for transport of dangerous goods by sea.

Ultimately, the IMDG Code covers the technical/operational part of carriage of dangerous goods by sea, including the classification, packing, marking, labelling and placarding, documentation and storage of hazardous goods.

These requirements are essential for all parties, especially Manufacturer and Shipper.

Carried by road

Dangerous goods are defined in Section 2 of the Motor Vehicles (Construction and Use) (Vehicles Carrying Dangerous Goods) Rules 2015:

“Dangerous goods” means referring to the materials listed in First Schedule (the First Schedule is attached for easy reference);

“Class of dangerous goods” means referring to the classes listed in Second Schedule;

“Dangerous goods vehicle” means any goods vehicle constructed or adapted to carriage dangerous goods.”

Malaysian Context

In Malaysia, the road transport industry is regulated by:

1. Land Public Transport Act 2010 [Act 715];
2. Panduan Dasar Pelesenan SPAD; and
3. Guidebook on Approval of Vehicle Types (Amendment) 2015

The road transport industry is slightly different from others. It is not subject to international conventions. Hence, for the definition of hazardous goods, it has to be cross-referred with the local law as mentioned above.

Conclusion

All the relevant responsibilities or obligations of each party/ industries are regulated by many different laws and international conventions. Therefore, each case or scenario might involve cross-checking international and local law to further examine the matter.

*This article is strictly for informative purposes. If you have any specific freight forwarder or shipping relevant matters, consult a professional for a better understanding.

Rahayu Partnership provides a wide range of services that cover internationally and locally. Please do not hesitate to contact us for a consultation.

By Rahayu Partnership, Malaysia
Law Firm Website: www.rahayupartnership.com

We sometimes hope that there is a magic spell to compel a person from not doing or doing something. But, we are not living in a magical world. Therefore, no one can force or control you against your will.

Realistically, we can still achieve that. Not by magic, but with a court order– injunction. There are so many types of injunction granted by the court. Once established, the court can order someone to stop doing things. For example, a man is no longer allowed to enter this neighbourhood. But, on the other hand, the court can compel a person to compensate in monetary form to another person.

Nevertheless, only serious matters can consider by the court. Therefore, the above examples are only for explanation purposes. In this article, we will only discuss ‘Mareva injunction’.

What is ‘Mareva Injunction’?

This specific injunction is derived from the landmark case of Mareva Compania Naviera SA v International Bulk Carriers SA(“The Mareva”) [1980] 1 All ER 213. It is originated from the United Kingdom. It intended to stop a shipping dispute and prevent the foreign party from transferring the money out of the country.

The legal definition is an ‘asset preservation order’ or a ‘freezing order’ in other countries. Mareva injunction aims to prohibit the defendant from disposing of his or her assets out of the jurisdiction before the plaintiff secures any judgment.

In simple words, it is a court order from stopping a person from moving their assets (money, property, belongings) out of the country before the plaintiff (the person who file an application against them) get a judgment.

Let’s read below to see how Mareva injunction is incorporated in Malaysia.

Mareva Injunction In Malaysia

The prominent national case of 1MDB is an excellent illustration of the Mareva injunction. Amid the legal suit, 1Malaysia Development Berhad (1MDB) and its subsidiaries filed a Mareva injunction against our former Prime Minister.

It is a Mareva injunction with the condition. Our former prime minister is allowed to withdraw RM100,000 for covering his living expenses. Other than that, Najib has to get written permission from 1MDB if he wants more.

Upon the injunction, Najid unable to use or move any of his assets out of the country until further legal proceedings. His lawyer can choose to apply to set aside the injunction. Nevertheless, there is no further update on the case.

Global Mareva Injunction

From Malaysia’s context, the Malaysian court can issue a Mareva injunction that is effective worldwide. Due to the convenience of owning an asset overseas, it is reasonable to cover all assets of a person (if all the assets, including the overseas, are under the same person’s name).

The earlier worldwide Mareva injunction dated back in 2005 (a case from stopping the person from embezzling his assets within and outside of Malaysia- Metrowangsa Asset Management Sdn Bhd & Anor v Ahmad b Hj Hassan & Ors [2005] 1 MLJ 654).

Until now, the recent Court of Appeal case (The Customs and Tax Administration of The Kingdom of Denmark v Saling Capital Ltd & 39 Ors). Malaysia’s Court of Appeal granted the injunction as the party fulfilled the requirement of the principle.

Conclusion

The application of Mareva injunction (including worldwide) uses the same principles. For a party to file a case, the applicant must have:

• A good arguable case
• There is a real threat of the defendant transferring their assets out of the country
• The assets must be within the jurisdiction (for example, within Malaysia to file a case in Malaysia)

A Mareva injunction is merely safeguarding the assets and funds. It does not provide any additional rights over the property. Rahayu Partnership offers a wide range of services that cover internationally and locally. We urge everyone to take care and stay safe. Contact us if you need a consultation.

References:

1. https://www.freemalaysiatoday.com/category/nation/2022/02/09/najib-to-mount-strong-challenge-against-mareva-injunction-says-lawyer/ 
2. Mareva Injunction as a Preventive Relief – IIUM Journals
3. https://www.theedgemarkets.com/article/najib-strongly-challenge-mareva-injunction-freezing-his-assets

By Rahayu Partnership, Malaysia
Law Firm Website: www.rahayupartnership.com