Problems and questions

WineWorks is a business which is based in Singapore. WineWorks purchases 4,000 bottles of red wine under Cost, Insurance and Freight (CIF) terms from the Gumtree winery in Victoria, Australia. Payment is made by cash in advance. Gumtree winery loaded the 4,000 bottles into cardboard boxes and it entered into a contract of carriage with Neptune Shipping to deliver the wine to WineWorks in Singapore. The cardboard boxes were not filled with bubble wrap or insulated. Under the contract of carriage, Neptune Shipping loaded the 4,000 bottles of wine onto its vessel in Port Melbourne on 1 April 2019 and noted on a clean bill of lading, and the vessel began its voyage to deliver the wine to Singapore.

The contract of carriage incorporates a limitation of liability clause inserted by Neptune Shipping, which reads as follows: “Neptune Shipping, as carrier of the goods, is not liable for any loss, damage or destruction to the goods during transit by sea”.

The 4,000 bottles of wine were stored in a safe part of the vessel, but not in temperature- controlled containers, so they were exposed to hot temperatures as they made their way to Singapore. When dropping off items in Indonesia on the way to Singapore, the vessel was held by Indonesian customs officials who investigated a container of goods which they suspected was contaminated, so the ship was seized by Indonesian officials for 5 weeks. As a result, the vessel sat in Indonesia for 5 weeks. When the vessel left Indonesia, it was struck by a large wave which shattered 2,000 bottles of the wine.

The wine finally arrived in Singapore on 1 July 2019, some three months after leaving Port Melbourne.

When the wine arrived in Singapore, the WineWorks wine panel tasted the wine that survived the journey and they found that it had been ruined by excessive exposure to heat.

Gumtree winery had contracted for insurance cover against WineWorks’ risk of loss or damage to the wine during carriage by sea. The contract of insurance incorporated the Institute Marine Cargo Clauses (A).

Gumtree winery is not answering correspondence from WineWorks. WineWorks is therefore wondering whether it can recover against the carrier (Neptune Shipping), whether it can claim under the insurance policy and whether it should change its international trade payments policy.

Please answer all of the following questions:

1. Who was responsible for the wine during its transit by sea?
2. What are the duties of the carrier in storing the wine on the vessel?
3. Are there any exceptions to liability and do any exceptions apply in this case?
4. Who can claim under the insurance policy and why?
5. Explain whether a claim can be made under the insurance policy. If you think a claim can be made under the insurance policy, explain why. If you do not think a claim can be made, explain why
6. What other payment methods in international trade should WineWorks have used in this case? What payment method or methods would you recommend WineWorks use in future similar transactions? Why?
   

Assessment Criteria

1. Identification of relevant issues
2. Identification of relevant law or rules
3. Application of law or rules to facts
4. Conclusion based on legal analysis
5. Clarity of expression and flow of argument
6. Proper referencing

Solution

Introduction

WineWorks entered into a cost, insurance and freight (CIF) contract with Gumtree winery and paid a cash payment in purchase of 4,000 bottles of red wine. Gumtree winery loaded the 4,000 bottles into cardboard boxes and got into a contract of carriage with Neptune Shipping to deliver the wine to WineWorks. In the carriage contract, was a limitation of liability clause inserted by Neptune Shipping denying liability for any loss, damage or destruction to the wine during transit by sea. Although Neptune stored the wine in a safe part, they were not in temperature-controlled containers. The goods were held in Indonesia for 5 weeks and were struck by a large wave on their way which destroyed 2,000 bottles. The remaining bottles arrived in Singapore on 1^st July 2019 and upon tasting were found to have been ruined by excessive exposure to heat. Gumtree Winery had acquired an insurance cover on behalf of WineWorks to compensate them for any loss occurring from destruction of the wine during the transportation.………………please following the link below to purchase the solution at $10