Link issue12 Final One - SCLG

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42 Insurance Timeliness of filing a claim The rule of prescription is like the sword of Damocles hanging over the head of every lawyer. In any dispute, one of the first things that lawyers must do when handling claims or disputes is to check whether there is still time to pursue the matter otherwise they run the risk of the sword falling on their head. But finding out whether a claim or dispute is time-barred is not always easy. Prescription is the statutory limitation of time beyond which an action, debt or crime is no longer valid or enforceable, in other words, it is the state whereby the cause to file or pursue an action is already timebarred. As used in this article, the term prescription and time limit are used interchangeably. In all jurisdictions throughout the shipping world, the first question to ask is what is the national law that has to be applied in order to decide issues on prescription or time limit. If a claim arises under a bill of lading or charter party which contains a clause on the choice of law, the situation is simple. For example, if the clause says that, “All disputes arising out of or in connection with this contract shall be governed by the law of France,” then everyone knows where to ask. But if the contract is silent, the lawyer needs to determine first which court to go in case the dispute cannot be settled amicably. As far as the Hague-Visby Rules are concerned, the problem arises on the fact that different jurisdictions have different rule on prescription. As an example, if a charterer lodges a claim against a shipowner because the owner fails to properly describe the vessel or did not deliver the vessel to the charterer as provided for in the charter party, the general time limit for such a claim under Dutch, French or German law is one year. However, in England, it is six years, and in Spain, the same claim will not prescribe for fifteen Author: Dr. Khalid M. Kadfoor Al Mehairi Emirates Advocates years. Moreover, in some countries, the situation is different for a claim made by a shipowner against a charterer. A claim to pay charter hire, for example, will prescribed or be time-barred in Spain within six months, within one year in France and the Netherlands, within three years in Germany, and within six years in England. By this fact, the statutory time limits between countries are far from being uniform. Such is the case for time limits of conventions connected to transport. The Hague-Visby Rules apply in 24 different countries, including the UK, France and Spain, but not in Germany or Portugal. Germany did not ratify the Rules, however, the provisions in its commercial code are fully patterned in line with the Rules. In all Hague-Visby countries there is a one-year period within which a cargo claim has to be filed. The same period can be found in COGSA (Contract of Carriage of Goods by Sea). But this one-year period is only applicable to claims under bills of lading. All others, such as those in tort, are not covered by these conventions and have a longer time of prescription. Period of prescription can be set not only in statutes or conventions but also in contracts, mostly charter parties or bills of lading. The three-month time limit under the Centrocon arbitration clause is well known, but here are even shorter ones in existence demonstrating how different contracts can have different requirements which again differ from statutory provisions. Under Article III Rule 6 of the Hague-Visby Rules provides for one year period. But even such a widely known and accepted convention does not guarantee uniformity. There are also many more questions to be answered when applying the rule on prescription. For instance, when does the one year period begin? Article III Rule 6 says the period starts to run when the cargo is discharged or should have been delivered. But what does this mean? The High Court of England rendered a decision in June 2002 in the case of Trafigura vs. Golden Stavraetos. Upon arrival of the vessel at the original contractual destination, the receiver refused to accept delivery of the cargo because it was damaged. The receiver subsequently arranged with the shipowners for the cargo to be carried to and delivered at another port. It could have been argued that with the consent of both parties, they are able to change the contract at any time and that the second port finally became the only port where the goods are discharged and, therefore, the decisive one. But the High Court thought differently, ruling that prescription under Article III Rule 6 of the Hague- Visby Rules began to run from the time at which the cargo “should have been delivered” at the original port of discharge and not from the time that discharge was completed at the second port. The claimant’s suit was, therefore, prescribed or time-barred and summary judgment was entered in favor of the defendant shipowners. It is clear that it is not always easy to say when the one-year period begins to run. But this is just one of a whole host of uncertainties where time limits are Contd.on page: 44 Supply Chain & Logistics Group | www.sclgme.org
Banking & Finance 43 E-payment benefits all and sundry The nature of payments constantly evolves for the most basic of reasons – because human beings are innovative, resourceful and pragmatic. We embrace new techniques and technologies that offer greater efficiency, convenience, and value creation, yet discard those that do not. The history of payments – the ways in which humans exchange value for goods and services – has been dynamic, fluid and driven by the marketplace. Today, that human determination to innovate and adapt – the same spirit that once drove us to shift from using bushels of corn to sacks of gold as a form of exchange – is powering the growth of a global electronic payments network. GLOBAL MARKET Electronic payment adoption has been growing at a steady pace worldwide. The number of electronic payments will double by the end of the decade, says research. The study of 79 countries, by research firm Global Insight, found that more than 210 billion electronic transactions are processed worldwide each year, but will be close to 420 billion by 2010. The Eastern Europe and Asia-Pacific regions are forecast to lead the world in electronic payment transaction growth, predicted at 21.6 percent and 19.2 percent respectively, for the period of 2004 to 2009. Other regions including the Middle East, forecast to increase 15.9 percent, and NAFTA (North American Free Trade Alliance), expected to grow 12.3 percent, point to considerable growth within economies that have already established their electronic payment infrastructures. Conversely, according to the report, the use of cheques as a form of payment is forecast to continue its decline; as measured in 2004, approximately 20 percent of non-cash transactions were cheque-based; in 2009, only 10 percent of total payments are predicted to be in cheque form. ADVANTAGES The widespread adoption of electronic payments has significantly expanded the sales volume of goods and services, reduced the barriers to immediate credit and liquidity, and eased geographic restrictions to trade and exchange. The benefits of electronic payments to all parties have been measurable and substantial. Benefits to buyers • The convenience of global acceptance, a wide range of payment options and enhanced financial management tools. • Enhanced security and reduced liability for stolen or misused cards. • Consumer protection through an established system of dispute resolution. • Convenient and immediate access to funds on deposit via debit cards. • Accessibility to immediate credit. Intuitively, the comparative cost of arranging for a consumer loan relative to the ability to obtain credit at the point of sale is substantial in considering both the direct processing costs as well as the implicit opportunity costs to borrower and lender. Supply Chain & Logistics Group | www.sclgme.org
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